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.
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.