Why have some businesses – Overstock, Expedia, PayPal, DISH and Microsoft among them – decided to let their customers pay or conduct other transactions using cryptocurrencies?
At first glance, the benefits would seem to be the same ones touted by any user of digital currencies: low transaction costs, built-in protection against fraudulent chargebacks and freedom from international currency exchange hassles.
“We accept donations globally, and we strive to provide a large variety of donation options,” Pats Pena, director of payments and operations, said in a recent announcement that the Wikimedia Foundation would support crypto transactions. “It’s very important that we can get international donations processed in ways that are efficient and cost-effective.”
The organisation’s chief commercial officer Sonny Singh added: “Bitcoin and Bitcoin Cash are one of the cheapest payment options available so more money goes to charity rather than paying fees.”
Patrick M Byrne, Overstock’s founder and CEO, offered a more libertarian-focused rationale in his company’s 2017 announcement about accepting cryptocurrencies: “Overstock is pro-freedom, including the freedom of individuals to communicate information about value and scarcity without relying on a medium created through the fiat of unaccountable government mandarins. For that reason, we have been an early proponent and adopter of cryptocurrencies.”
Beyond the usual benefits associated with cryptocurrencies, there are other reasons a business might want to support transactions with Bitcoin or other alt-coins. For example, accepting cryptocurrencies can help send the message that your company is a little more tech-savvy than most. Or it might add a selling point that appeals to the passionate niche market of cryptocurrency enthusiasts.
Ohio, for example, recently became the first US state to accept tax payments in cryptocurrencies. In his announcement, state Treasurer Josh Mandel said the decision not only gives citizens more choice in payment options but also helps to “project Ohio’s leadership in embracing blockchain technology”.
“Accepting Bitcoin may also be a positive event for your brand reputation,” the payment processor Due notes. “For example, if you’re a high-tech company with an audience comprised of tech enthusiasts, accepting the digital currency could make your brand look more progressive and forward-thinking. It’s a signal that you’re prepared to take risks if it means adopting something better. Also, it may illustrate you as a leader in your industry. This is especially true if other companies like yours haven’t yet started accepting Bitcoin as currency.”
There’s also the possibility the volatility of cryptocurrencies can work in a business’ favour, as Forbes recently pointed out: “If you get paid in one, there’s a chance it could be worth significantly more in the next few days. Of course, you might lose that value too.”
Adding crypto to its payment options can also demonstrate an organisation’s support for a particular charity or cause. A number of cryptocurrencies have been created specifically to promote charitable causes. Becoming crypto-friendly can also be an effective marketing or fundraising strategy.
“Bitcoin has been great for the nonprofit industry,” Inc. reported in late 2017. “Non-profits have used the acceptance of bitcoin to raise awareness for their causes in the tech community, and across the globe.”
Finally, there’s one more reason a business might consider adding cryptocurrencies to its payment mix: FOMO… that is, fear of missing out.
“Don’t forget—you aren’t the only company in your industry thinking about adopting Bitcoin,” Due noted. “If most or all of your competitors start accepting Bitcoin payments before you do, Bitcoin enthusiasts may change their brand allegiance. Even worse, you may look like you’ve fallen behind the times. This is especially true as the popularity of cryptocurrency grows.”