Not everyone wants to pay by credit or debit card. EBT, cash transactions using third party payment centers and Paypal are three of the most common alternatives, but new payment methods are rapidly appearing as part of the mobile revolution. Square, Google Wallet, and Apple Pay are all becoming more accepted and each has their own benefits, but Bitcoin deserves some serious attention as well. Here are some basic answers on Bitcoin, along with the pros and cons of accepting Bitcoins as an alternative payment method.
In 2009, an anonymous poster introduced the idea of an online cryptocurrency in the paper, Bitcoin: A Peer-to-Peer Electronic Cash System. An open source client placed the first block of Bitcoins on the market and forums were introduced to negotiate the value among potential users. The first purchase with Bitcoins is said to have been a pizza from Papa Johns.
Over 1,000 merchants began accepting Bitcoins as an alternate form of payment by 2012. Some of the biggest names now taking Bitcoins for payments are WordPress, Virgin Galactic, OKCupid, Tesla, Reddit and eBay. In 2014, the U.S. Commodity Futures Trading Commission approved Bitcoin as a financial product in some instances.
The main reason many merchants are wary of Bitcoin is the lack of regulation. The IRS treats Bitcoin as a commodity, not a currency, and it is not insured by the FDIC. Lack of regulation means that users don’t have to disclose their identity, which has linked Bitcoin to illegal online activities. While this normally doesn’t pose as a problem for bit-torrent sites like MEGA and online gambling houses, many merchants are steering clear of the entire issue for now.
The approach most merchants are comfortable with right now is “wait and see.” Whether or not to accept Bitcoin really depends on the kind of subscription service offered. Future-forward technology brands, like Virgin Galactic, have found that Bitcoin enhances their brand messaging of being risk-takers, no matter what the other costs involved. Other companies, like WordPress and OKCupid, benefit from Bitcoin’s attention to online privacy. On the other hand, financial services and more traditional industries may want to avoid Bitcoin for now if their brand messages center around issues of trust, stability and security.
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