Should we accept payments in bitcoin?

Should we accept payments in bitcoin?

Between the Chinese central bank that indicates April 11 that it will not always bans Bitcoin (unlike Russia, or the Australian Bank), Amazon announces three days later rejects bitcoins on its services, and the recent Judicial liquidation of the MtGox platform: the news around the most famous electronic currencies is not drying up. Faced with all these events, some of which are in the direction of a development of this currency, others are aimed on the contrary to prohibit or control.

Large companies need their interest in this system. Monoprix (a large company based in france holding supermarkets), started to accept bitcoins on their website in 2014. Certainly, Patrick Oualid (director of the electronic commerce of Monoprix) the goal is not to develop significantly the turnover of the company, but "to tame" this new way of paying. Thus, if Bitcoin develops significantly in the future, the brand will be ready. And whatever happens, the operation is already beneficial for Monoprix: the mediatization was important, it is a real "marketing action".

However, is there a marketing interest for businesses today to accept Bitcoin? Is not the goal to have visibility in the media, and to display an innovative image? Is there a real interest in accepting payments in bitcoin? It all depends on the company's depth of integration of the Bitcoin system into its business model. But as there are no two companies that look alike, the advantages and disadvantages for professionals to accept payments in bitcoin.

Bitcoin payment: the benefits for businesses

The ease of implementation of a payment solution!

Deploying a solution to accept bitcoins is relatively fast and easy, since there is no permission to ask. To create a Bitcoin account, the procedure is the same as for an individual. We must first install an app that will allow the professional to manage his bitcoins. It can be a solution to install - a desktop solution - (like Multibit), or an online solution (like or even mobile (like bitcoin wallet for example).

The system is similar to a peer to peer solution, and will connect the professional to the Bitcoin network. This is the network that will allow the exchange of bitcoins, but also the validation of transactions: all computers connected to the Bitcoin network can potentially be solicited to validate transactions (it is a decentralized system). A digital wallet is also created, and will allow the professional to store his bitcoins.

But this approach only allows to transfer bitcoins. A professional will most often choose to sell a service or property in bitcoins, and convert, as soon as the sale is effective, bitcoins in a "real" currency, in euros for example. It must then go through an intermediary, which will not take any transaction costs (such as Bips or Blockchain for example), or very small fees (often 1% of the sale price).

For example, the ExagonPay API, which interfaces with many e-commerce solutions (Drupal, Magento ...), will recover the customer's payment in bitcoin and pay the merchant directly in the currency he has chosen, in a bank account, taking the passage 1% of the price of the sale. 

The assurance of being paid

Any payment in bitcoin is final. As for a transaction paid in cash. And if there are fake bills or fake blue card numbers, there are no fake bitcoins. Each bitcoin is identified from its creation to the present date, through all the transactions in which it is involved and which are recognized by the cryptographic signatures of all the nodes of the Bitcoin network that endorse it.

Other point: a client can not be denied a payment after confirmation of a Bitcoin transaction, for example because of a cancellation of payment (while the product is already sent, or the service used), as is regularly the case for e-merchants with traditional payment systems by making any charge back or appeal.

Bitcoin payment is therefore very safe, but it is not very fast. Indeed, the Bitcoin network validates a transaction, which is almost instantaneous, provided that, if the transaction is validated, it is not confirmed. The network may take up to 10 minutes to confirm a payment (it is generally accepted that at least 6 validations of the network are required to define a confirmation). Between validation and confirmation, a transaction is reversible. The professional must therefore ensure that the payment solution he uses only validate an order after confirmation, not after validation (essentially for transactions over $ 1,000). These settings are made in the Payment Bitcoin API options.

No sales cancellations that generate costly returns (or losses), no false numbers, Bitcoin payment ensures transactions for businesses.

Very low or no transaction costs

The cost of an online transaction by credit card for a professional can reach up to 7% of the selling price. For a Paypal payment, the organization charges a "fixed" of 0.25 euros, to which must be added a variable of 1.4 to 3.4% of the selling price, knowing that it is necessary to generate more than 2 500 euros monthly Paypal transactions to go below 3.4%. For a Bitcoin transaction, the costs are about 1% of the selling price.

A trader who has a 10% margin on a product, but a transaction cost of 4% (with online payment by credit card for example), has a real margin of 6%. Using the Bitcoin system, the same trader sees his real margin increase from 6 to 9%, a margin increase of 33%.

A trader who margin little on its products or its services will therefore observe a very big difference using the Bitcoin system. The increase in corporate margins would be such that a study by Goldman Sachs estimates that a generalized move to Bitcoin would save $ 210 billion in transaction costs per year.

The confidentiality of short-term transactions is ensured

All Bitcoin transactions are anonymous, Bitcoin software never requires registration or declarative identity. It is for this reason that the Bitcoin system had, in the beginning, this sulphurous reputation as a currency for "pirates and terrorists".

But at the time of the Prism case, many individuals and traders may be attracted by the relative confidentiality provided by the Bitcoin system, regardless of the nature of the transaction. It's a commercial argument.