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I was raised in the UK, so it’s perhaps not surprising that I used to feel that any currency without a picture of the Queen on it was not real money.  

Now having lived in the Eurozone and America, I have liberalised, but I seriously question whether our customers need a currency like Bitcoin.

Is Bitcoin really relevant to the consumer?

As a digital currency, Bitcoin is sometimes sold as an easy solution to the problem of adapting a website to accept numerous currencies. But is it really relevant to the customer or even on their radar?

At the moment we’re not seeing customer-led demand for the peer-to-peer electronic payment system. When you already have a widely accepted and recognised currency, does the consumer really want another?

Of course, the currency of the country in which a company is based is the first choice for ecommerce providers. Most online retailers are expecting to sell to their local market and want their consumers to pay in a currency they understand and trust.

Bitcoin ecommerce

In the USA and Europe, this has the advantage of being the currency of a huge market. There are around 332m people in the Eurozone and 314m in America. Before the advent of the euro there were marks, francs, schillings, pesetas, guilders, lira and drachma in the 17 different currencies across what is now the Eurozone.

So the euro has certainly made our life easier as we sell across all of these zones. Consumers like to be able to see exactly what something will cost (easier to evaluate in their own currency), and not have to worry about extra charges for paying in dollars, say.

Our biggest markets are the Eurozone and the USA, but we still need to offer niche currencies too. The local consumer needs to match the value of what we offer them against what they can buy locally both online and offline.

However, the cost of receiving payments in Bitcoin is fraction of a credit card fee. It is a fast and cheap way to process transactions. But every credit card company is working towards solving micro-payments, so it is only a short term benefit and above all the customer does not care about what retailers pay as a transaction fee. 

So, Bitcoin does not make anything easier for the retailer; it is just another currency, and not a widely used one.  In terms of expanding into new territories, most retailers would find delivery more of a problem than a new currency, as long as it is offered by their payment provider.

It also does not make things easier for the consumer because they cannot compare value against the goods for sale in other local outlets.  The consumers or businesses that might be interested in the Bitcoin are those that live in regions with an unstable currency and therefore prefer to keep savings in stable currencies such as the dollar, euro or pound.

For example, I have stood in the Ethiopian highlands, Tanzanian Masaimara and Cambodian jungles discussing the dollar, euro and pound exchange rates; an example of how different currencies are already used to overcome challenging monetary environments.  

99% of customers in the regions we serve and where ecommerce is established, already have payment methods they prefer. We also have PayPal of course; widely used as a payment method in every currency we sell in.

Although it is a different service to Bitcoin, it also has a critical mass, closer to 10% compared to Bitcoin’s 0.01%. Bitcoin can’t compare with that level of usage at the moment. 

Ultimately, I do not believe that Bitcoin is valuable to society or commerce; therefore it is unlikely to catch on.

It might be more effective to use t-shirts as a currency! After all, their price is based on a cotton natural resource, which has a supply and demand fluctuation like gold.

Inflation on cotton is high so they are inflation proof, and you can even print a picture of the Queen on them.  

If all else fails you can also wear your currency and make jokes about the taxman 'wanting the shirt off your back'. But due to wallets having to be the size of wardrobes it is an idea that is unlikely to catch on any better than Bitcoin. 

But the internet is a funny place where new ideas do catch on. Our job is to try and cover as many of our customers’ needs as possible, so if enough people want to use either Bitcoin or even t-shirts as a currency, we will adapt and find ways of taking payments. 

Philip Rooke

Published 21 October, 2013 by Philip Rooke

Philip Rooke is CEO of Spreadshirt and a contributor to Econsultancy.

8 more posts from this author

Comments (21)

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Liam Fisher

It's certainly true that bitcoin doesn't make anyone's life *easier*. It's awkward to use at the best of times, and the erratic inflation/deflation problem adds a big element of risk. Nobody wants to buy their bitcoins then find out that they're next to worthless by the time they spend them.

But the motivation behind bitcoin was always ideological in nature. It was intended to allow private citizens a way to conduct their private business away from prying eyes and without being forced to route their transactions through banks they might see as corrupt or otherwise immoral. That's become even more prominent in light of growing global awareness of just how prevalent government surveillance has become.

So, bitcoin might not be great for anyone in terms of customer experience, but it's still one of the best ways we have of sticking it to 'the man'.

about 3 years ago

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Jonas Lihnell

I'd have to disagree, bitcoin does make it easier for consumers. The quality of phone payment systems compared to bitcoin is about on par and moving away from cash or plastic credit cards seems to be the trend, and rightfully so.

In the end, the value that bitcoin provides will not come from consumer-demand at-first, but for charities who need perfect transparence to maintain a marketable integrity and for international markets as well as remittances the current monetary systems has way too high costs.

about 3 years ago

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Peter Piper

'Ultimately, I do not believe that Bitcoin is valuable to society or commerce; therefore it is unlikely to catch on.'

Herein lies your ignorance; you obviously do not understand Bitcoin. If you can see no benefits to a global payment system with extremely minimal transaction cost you're either A) delusional or B) archaic.

That is why so many very talented & intelligent individuals are putting so much time & effort into Bitcoin, because it is a transformational technology due to the reason I alluded to in my previous sentence yet you don't even mention it... And you believe it has no value.

I'm curious, did you spend more than a few minutes researching Bitcoin before you started rolling your face on the keyboard?

about 3 years ago

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Brent Allsop

Yea, even if you did spend more than 5 minutes studying Bitcoin, you show no evidence for such.

So many things you are missing, one of which is the rate of increase in value. if you don't believe how fast Bitcoin has grown in value over it's short history, and if you want to see what the experts are predicting a Bitcoin will be worth in a year, (to say nothing of what it will be worth in 10 years) Check this emerging expert consensus page out at Canonizer.com:

http://canonizer.com/topic.asp/154/2

If anyone has a different POV, you should get it canonized, to see how many experts agree with you, compared to the current emerging consensus.

about 3 years ago

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bob

You cannot send a tshirt over the internet at will.

Bitcoin allows any person in any country to pay any one else in any country, in any amount, at will, practically instantly, and practically free. Paypal and credit cards do not allow this and they are not likely to ever offer such a service. As Wordpress said when they started accepting Bitcoin, Paypal does not work in over 60 countries. Bitcoin serves the globe.

http://en.blog.wordpress.com/2012/11/15/pay-another-way-bitcoin/

Uninformed critics have been making your arguments for at least two years now. Meanwhile, demand for Bitcoin has skyrocketed and so has the market price.

about 3 years ago

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Chris

It takes days to wire money from bank to bank. With bitcoin it takes minutes to send it around the globe and back. Also by making the cost to the merchant to accept payment close to nothing this then passes on the savings to the consumers making them more likely to pay in bitcoins or buy from that retailer. Bitcoin also makes it possible to accept funds that payment processors may refuse to accept, such as how bitcoin and litecoin are the only way to donate money to wikileaks. It has its advantages other than the ideological revolution that is also thankfully represents.

about 3 years ago

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joe

Sure, sure, Bitcoin has no particular value to retailer... Even though existing Paypals and Mastercards of the world rip the merchant off 3-6% of their revenue (which is comparable to the percentage of online retailer's profit in most cases). And make him swallow fraud losses to boot. While Bitcoin acceptance is fee free, and fraud is 0 (yes, ZERO).

Of course, retailers should stick to "proven" payment systems and currencies and shun the Bitcoin by all means.

about 3 years ago

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Todd Fletcher

Retail commerce is just one use for Bitcoin; it also has major potential to move in on the global remittances market, estimated at $400 billion.

about 3 years ago

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Ashok Misra

As others before me have pointed out, you are obviously completely ignorant about this subject.
-Ashok
http://www.linkedin.com/in/paymentsnut

about 3 years ago

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Aaron Holmgren

Bitcoin takes out the middle man. Bitcoins can flow directly from the consumer's computer to the merchants server. All the overhead of the credit card processing industry is alleviated. Furthermore, those bitcoins, once they reach the merchant, are his. They cannot be taken back by a fraudulent consumer. Bitcoins will streamline and simplify online payments; and as they become more ubiquitous and bitcoin infrastructure spreads they will grow in convenience.

about 3 years ago

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Johnny

Thank you for the chuckle.

Johnny remembers trying to describe the Internet to people back in the year 1995. They often looked quizzically at him and shook their heads.

After all, they said, they were "perfectly fine visiting the library and reading newspapers for all the information they need". Therefore, there was no reason for them to ever use the Internet.

Bet they won't admit to that now!

about 3 years ago

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Juliusblumfeld

Oh the irony of it all. I just bought a tee shirt from an online shop ("Something Geeky") using bitcoin.

about 3 years ago

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Sean Owens

Bitcoin may never become a main stream currency because it has been adopted by those trading in illicit goods and services internationally who want to hide from tax and law enforcement.

about 3 years ago

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Keith Horwood

Looks like click-bait to try and sell t-shirts. Am I the only one who feels Econsultancy has gone downhill over the recent months?

about 3 years ago

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Philip Rooke

Interesting comments and I appreciate your different points of view.

I would not describe myself as "archaic" I have been around for some time. I was using the Internet in the late 80s and commercially exploiting the WWW since 1996.

In that time I have seen is a great many good ideas by much cleverer people than me fail because the consumers or business's do not "get it". If customers have to give it more than 5 minutes research to "get it" then they are unlikely to do so. I have learned this the hard way with my own effort and money "Clever does not sell, simple and needed does".

If enough people do "get it", then I will obviously support it but as a ecommerce platform and retailer I have a 1000 higher customer priorities to work on before a whole new currency that not a single seller or buyer as ever requested.

PS The using T-Shirts was sarcastic a joke
PPS If you think writing opinions is a good ROI to sell T-Shirts then you are sadly mistaken. This is my industry and I like contribute, that is all

about 3 years ago

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Ben Goodwin

"If enough people do "get it", then I will obviously support it but as a ecommerce platform and retailer I have a 1000 higher customer priorities to work on before a whole new currency that not a single seller or buyer as ever requested."

That part is fine, but your article goes much further than that, in fact you say:

"Ultimately, I do not believe that Bitcoin is valuable to society or commerce; therefore it is unlikely to catch on."

Can you see how those two comments significantly differ? One is assessing the current demand for something and making the objective decision to not prioritise its implimentation, that's sensible, although hardly a groundbreaking opinion seeing as next to no retailers take bitcoin yet.

The second reads like an ill-informed opinion which isn't really backed up by a single bit of evidence in your piece. To suggest there's no benefit to Bitcoin at all is ridiculous, the growth in its value has already proven your statement incorrect.

about 3 years ago

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Philip Rooke

Agreed the first statement is reality. If my customers want it regardless of my personal opinion I will do it. For example my customers like Twitter, I do not. I use Twitter to communicate with interested customers who like it as a communication tool.

The second is personal conjecture. I fail still fail to see why it is beneficial to consumers and therefore ecommerce. Credit cards, direct payment or other methods work well and cost the consumer nothing. Therefore I do not see why the average consumer will want to use it. If they do not see a compelling reason to adopt it then no retailer will. Therefore I do not think I will ever have to work with Bitcoin for my customers.

As a mass market retailer I tried to find 10 reasons as to why the average consumer might want to use Bitcoin:

1) Better security - but most customers are not unhappy with transaction security via existing methods, they live with risk. And those that are worried tend to shop with trusted brands to reduce the risk rather than move payment methods.

2) Zero % fraud - This is a retailer problem not a consumer one. Most credit cards offer fraud protection to consumers. The cost covered by the transactor and retailer, so the consumer does not care. Retailers cannot force consumers to use payment to suit their needs. I promise you that if I could reduce the 1% fraud on my business I would.

3) Lower costs - not to the consumer, very few retailers offer lower costs to non-credit card payers. Many are not allowed under their payment contracts. Other than tickets for events and travel it is rare to extra charges for credit cards and most consumers have debit cards.

4) Less complexity - hmmm so a consumer has to get another currency from their every day one and then try and work out the pricing. Well that will be easier.

5) Ideology or "sticking it to the man" - the mass market is "the man", works for the man or does not care. Therefore this will always make it a minority issue.

6) Taking out the middle man - only has an advantage if the consumer gets a lower cost or cares about "sticking it to the middle-man"

7) Speed of transaction - the average consumer does not care. "I make a payment I get my product. I guess the money gets there in the end". If you are transferring large enough amounts that interest over a 24 hour transaction becomes a problem them yes this may be of interest. But this has only happened 2 times in my life when buying or selling a company, and simple methods exist to deal with it, this is not mass market.

8) No regulating tax authority - but most consumers pay income tax from salary and buy goods from VAT tax paying retailers. Perhaps some self employed people might like the idea but then the companies who pay them still have to declare payments. So only tax avoiding rich or criminals will care.

9) e-wallet - this ideas I like but I have seen plenty of evidence that people are using paypal as a wallet. And in the last decade their have been 1000s of attempts to get to critical mass on e-wallets. The people who win here will be mobile phone billers who can use the phone as a wallet and have the consumer already. I bet on Vodafone or O2 over Bitcoin.

10) Accepted globally. I have to over 40 countries in my life and never had a problem with Visa or Mastercard. For personal reasons I have had to send money to Tanzania, Ethopia and Cambodia but standard cheap banking systems have never been a problem. So only useful if you are trying to do business in very strange places. Again not mass market.

So in the end Bitcoin seems to be a system that will work for tax avoiding rich who are anti-establishment and need to send money to really difficult places. Being ironic it sounds like rich public school boys on their year off before university. But it is not mass market.

I receive 100s of requests a month from consumers and our ecommerce platform sellers wanting Amazon checkout and payment. We have yet to have one for Bitcoin.

If Bitcoin is not mass market then it will be of little use to ecommerce retailers and platforms. And that was the title of my thought opinion.

Again I am more than happy to be proved wrong. But I want to see and argument for mass market usage. If you are hunting for ideas also look up Beenz, Flooz and Speedbucks.

Phil

about 3 years ago

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Richard Catto

I don't know how you arrived at the conclusion that bitcoin has no value to society.

You need to do more research.

about 3 years ago

Graham Charlton

Graham Charlton, Editor in Chief at ClickZ Global

@Keith I'm sure there are much better ways of selling more t-shirts than writing a guest blog about Bitcoin. Also, if I wanted to boost pageviews with 'click-bait' this isn't the topic I would choose.

We have guest bloggers to add a range of opinions and perspectives to the site. You may not agree with Philip's views on Bitcoin but I think it's perfectly valid for an experienced ecommerce professional to put forth his views on the subject.

Out of interest, what makes you think we've gone downhill in the past few months?

about 3 years ago

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Philip Rooke

If you are really interested Bitcoin is just like any other currency and can be defrauded.

http://www.coindesk.com/czech-bitcoin-exchange-bitcash-cz-hacked-4000-user-wallets-emptied/

And it is not the first time

https://bitcointalk.org/index.php?topic=83794.0

@Graham

eConsultancy has not gone down hill, but our industry's and societys ability to debate has. Everyone wants a sound bite in 140 characters and it is easier to be rude than debate the issue.

about 3 years ago

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Tony Wild

21st century version of the 'Tulip bubble 1637'

about 3 years ago

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