Objections to Accepting Bitcoin, According to Businesses
Business owners and cryptocurrency evangelists explain why some businesses are reluctant to accept Bitcoin.
While Bitcoin transactions have seen a steady increase in recent years, it still remains far from a universally-accepted currency. For example, CoinMap’s coverage of Phoenix, the 6th largest city in the United States with a population of almost 1.5 million, lists only a handful of business that accept Bitcoin, with a mere 33 in the greater metropolitan area of over 4 million inhabitants. Despite its efficiency of use and the ability to easily deal with price volatility, many businesses still express reservations about accepting Bitcoin.
Cointelegraph spoke with several businesses that give customers the option of paying in Bitcoin about complications that could arise and cause other businesses to avoid offering the same. We also spoke with a Bitcoin evangelist who has been instrumental in both convincing local businesses to accept Bitcoin as well as setting up Bitcoin ATMs or BTMs.
Willingness to use Bitcoin not universal
Mark Warden, realtor and owner of Porcupine Real Estate, has had clients willing to buy with Bitcoin, but the desire was not reciprocated among all parties involved.
“I’ve had one client that wanted to purchase a house with Bitcoin, but the seller wanted USD. My client had to liquidate the btc using Coinbase in order to consummate the transaction. I do have a client who will sell land in Grafton for Bitcoin if the right buyer comes along looking for that location.”
For Seth Hipple, criminal defense attorney and partner at the Law Offices of Martin and Hipple, willingness to use Bitcoin wanes when faced with the additional effort required to make such a transaction.
“The hoops I have to jump through to comply with the ethics rules mean that people generally prefer to pay me in [US dollars].”
Barriers to Bitcoin acceptance
Hipple would like to accept more business paid in Bitcoin, but several barriers exist because of the nature of his practice.
“First, I have to hold the Bitcoin separately in trust until the case is completed. This means that each client has to have their own unique wallet in which to hold the funds while waiting to earn them. Also, [the] client and I have to agree on a price for each Bitcoin. I charge an hourly rate, so we have to agree on a date to use as the valuation date. Otherwise, it just becomes unwieldy. We also have to agree on what will happen in the event of a refund.”
These added complexities make most of Hipple’s clients opt for more traditional methods of payment instead.
“Usually, when I start going through the Bitcoin addendum with the Client, they say they'll just pay in USD.”
Warden has similar complexities related to accepting Bitcoin for his real estate business, since the title company he works with is wary of price fluctuations during a pending sale.
“The main concern on the title company’s part is the danger of a rapid decline in the value of Bitcoin. This isn’t a problem if the entire transaction is denominated in BTC, but if one party has BTC and the other wants USD, the title company is at risk of losing out if the value drops between time of deposit and the closing (usually a day or two later).”
Ian Underwood, owner of firearms manufacturer Shaolin Rifleworks, said that his “biggest obstacle [to accepting Bitcoin] was finding a way to get our Wordpress/Wu Commerce site to accept it.”
Ian Freeman, host of radio program Free Talk Live and prominent local Bitcoin advocate, confirms some of the concerns businesses have voiced regarding Bitcoin acceptance.
“Obvious concerns from merchants include converting it to cash and the instability of Bitcoin. Others need to have the concept and benefits (like near-zero-fees) explained to them.”
Making businesses feel more comfortable with Bitcoin
Warden thinks that the biggest challenge so far, as far as the real estate business is concerned, is finding both a buyer and a seller of a property who want to transact in Bitcoin, with the second-largest being “for the title company to reduce or eliminate risk of loss if the value drops while sitting on Bitcoin prior to a closing.”
Freeman believes that properly educating businesses is the best way to ensure that they eventually adopt Bitcoin.
“I've heard it likened to trying to sell the idea of credit cards to businesses when they came out decades ago. Rome wasn't built in a day, and we're still in the early-adopter stages of businesses accepting Bitcoin. As the merchant tools get easier to use and better integrated with point-of-sale systems, the technical objections will go away, but the real key is popularity, and that's the tricky part.”
He continues that businesses are less motivated by the ability to be ahead of the curve on the adoption of new technology, and more by the prospect of potentially falling behind competitors and losing customers.
“With popularity, it's much easier to sell the idea. After all, if 10% of their customers started asking if the business accepts BTC, then they'd spend plenty of time investigating it. Or, if their competitors start accepting it, that might spur them into taking a closer look. Here in Keene, NH we have a handful of prominent downtown businesses that accept BTC, and it helps a LOT to get a business owner's attention when they hear that other local businesses have already taken the plunge.”