Know The Pros and Cons of Using Bitcoins for Retail Space!
Bitcoin is really a tricky bubble to place the bet on!
Though, tech race has fueled its adoption and sheer number of retailers is hopping onto this bandwagon.
There is a lot of noise in the market regarding the acceptance of digital coins by the retail landscape.
Amidst several concerns like- security, charges and more, retailers struggle to decide internet-based currency is ideal to embrace or not.
However, the virtual currency has solved many problems that current payment option suffers from, but at the same time, one cannot deny the uncertainties it has put forth.
So, one should go deep down before getting their feet wet in Bitcoins.
Take a glance at the reasons that support and oppose the use of Bitcoins in retail landscape.
Here are the Pros!
1) Unbeatable security
Bitcoins provide rock solid security during transactions made at any end and no fraudulent act would be possible.
Let’s see how transaction made with Bitcoins is more secured.
If Mr. James wants to transfer Bitcoins to Retailer, then
Firstly, Mr. James will inform Retailer, and then Mr. James needs to create a block that comes with a cryptographic key pair: a private key that is only retained by the Retailer and a public key for others.
Afterwards, Mr. James will tell the bitcoin client, software that mediates the transaction to transfer 10 Bitcoins to Retailer’s block. The client will transfer 10 Bitcoins to the new block.
The block can be accessed only with the private key that Retailer had and the public key for others to verify the transaction.
This way Bitcoins provide no single chance to the hackers to hack the system in any way. It will make the Bitcoins- future of money.
According to Juniper research, “Transactions via Bitcoins in retail space will double by 2017.”
Note: Retailer should use escrow services for payment transaction using Bitcoins, otherwise the transaction will remain no more secured.
2) Power cross-currency transactions
Ideally, every retailer accepts the same currency for the cross-border transactions. When the currencies are converted during transaction, it is being said that no conversion fees is involved with foreign exchange market.
However, the truth is other way around as foreign exchange is a part of every cross-currency transaction and it incurs the cost for the conversion which adds up to as high as 10%.
Bitcoins are cost-efficient solution for cross-currency transaction at cross-borders. They can be referred as natural payment product for the retailers across the globe and boost cross-border sale as well.
3) Low transaction rates
Truly said, money makes the world go round and when people get the same services at low or no cost, then they surely turn towards it.
And, Bitcoin comes with no exception.
Credit card companies would charge up to 3% for the transaction while Coinbase doesn’t charge anything until there is $1 million in sales. When it crosses $1 million, then it cuts just 1% only.
Low transaction fees in-person for merchants and customers enhancing its use in retail space.
For instance, Purse.io opened the bitcoin retail store in the San Francisco. The brick and mortar stores promoting the use of the currency by offering 5-20 percent discount on the items people buy using Bitcoins.
Well, using bitcoin is not all sunshine and rainbows, but there are some glaring setbacks associated with the use of Bitcoins at retail store that cannot be overlooked.
1) No chargeback allowed
Bitcoins prohibits the reversal of transaction, means no refunds are possible using this service.
For instance, if the customer made a purchase using Bitcoins from the retailer, but if the promised goods are not delivered or involved any issue, then retailer cannot send back the money.
However, the lack of chargeback option in Bitcoins turns out to be an appealing alternative for the retailers as according to Total Systems Services, credit card chargeback cost U.S. retailers an estimated $15 billion a year.
2) At the time of tax filling
As, uptill no government body accepts bitcoin payment, so tax filing process would be a bit murky for the retailers using bitcoins. It includes complicated conversion of bitcoin into the currency, fluctuating value of Bitcoins and federal income tax confusions.
Merchants need to convert bitcoin based earning to local currency and should accurately track all bitcoin transactions.
Plus, at the time of tax filing, real time exchange rates of Bitcoins are considered and if the market is down, then merchant will be at loss.
3) Impossible to retarget the customer
With credit card payment, retailers can get some information about the buyers and using that they can approach the customer again, but this opportunity is impossible with Bitcoins.
Retailer embracing Bitcoins would not be able to glean any data as it discloses no information about the customer during transaction.
Is this the future?
Bitcoin is aimed to make buying and selling goods faster, safer and more convenient. Trading with virtual currency has big potential, but it swings in both directions.
Know more about the bitcoins, here.
Well, the alternative currency has started gaining momentum, but is still far away from the mass adoption.
Recently, LazyCoins demoed their killer Bitcoin app LazyPay at the BitcoinExpo 2015 and debuted Bitcoin use a part of everyday life.
This all are the flurry of ideas roaming around the retail space across the globe.
Have you ever used Bitcoins? What do you think; bitcoin will create a new horizon in your business or turn away your customers? Share your views in the comments given below.