Bitcoin is seen as an alternative form of online payments by many online merchants. Unlike fiat currency, where the merchant has to go through a long list of formalities and deal with limitations that come along with it, bitcoin payment integration is universal across the world.
Bitcoin payment makes the whole process easier for both the merchants and customers, especially on international sites. While merchants don’t lose out much on transaction and forex fees, the customers don’t have to worry about the platform not accepting their cards, or their bank not approving an overseas payment (which is a challenge is few places). It will also enable those without a bank account or a credit card to make online purchase.
In spite of the advantages, the ecommerce sector is experiencing a slowdown when it comes to bitcoin payments. Unlike previous year, the number of bitcoin transactions seems to have gone down by a considerable percentage. Expedia, the online travel and hotel bookings portal has reported a 40 percent decrease in bitcoin purchases. Other companies and event management portals are also reporting reduction in number of bitcoin based purchases, with few merchants experiencing a fall of up to 90 percent compared to previous year.
Even though the volume of bitcoin transactions seems to have decreased, the number of merchants including bitcoin payments as an additional option is gradually increasing. The reason for reduction in number of bitcoin payments can be related to the declining bitcoin prices. Compared to the same time last year, the bitcoin prices have gone down by more than 50 percent, and there are those who are holding on to the bitcoins from those times, expecting the bitcoin price to rise so that they don’t lose out on market volatility.
Apart from that, the reduction can also attributed to specific industry sectors. Even with Expedia, the fall in bitcoin payments was experienced only on hotel booking options where people have to pay upfront. Expedia’s services also includes pay later option, where customers can choose to pay when they check out of the hotels. Even in case of airlines, the company is allowed to only accept payment types that are accepted by airlines. These conditions may have resulted in the platform receives less bitcoin payments.
However, Expedia will continue to have bitcoin payment support on its site until there is a demand for bitcoin payments among its customers (even if it is a small user base).