One of bitcoin’s most-often cited challenges is the need for widespread merchant adoption. In examining this issue, bitcoin researchers often note that only a handful of big-name merchants like Tiger Direct accept bitcoin. What often gets less attention is the benefits small merchants are finding with bitcoin; the reason being that smaller merchant adoption is harder to track.
High Violet Salon and Spa in Wisconsin Dells, a tourist city in northern Wisconsin, has embraced bitcoin for the same reasons that many other businesses have – lower transaction fees, ease of use, and the option of cashing out bitcoins for fiat currency at the merchant’s convenience, according to wiscnews.com, the website for several Wisconsin daily newspapers.
High Violet Salon and Spa is one of several small merchant bitcoin success stories CCN has reported in the last year. These anecdotes indicate bitcoin is making progress in this important customer base.
Salon owner Christine Pankow notes that customers can pay with bitcoin using a smartphone app, similar to Google Wallet and Apple Pay. A customer can securely buy bitcoin using their bank account.
Merchant Likes Low Fees
Pankow especially likes the fact that when customers pay with bitcoin, she as the vendor does not pay transaction fees as she does with credit cards. Instead, the customer pays the fees, which are lower than credit card fees. This factor alone is encouraging Pankow to accept bitcoin payments.
She said she has been getting “robbed” for years by paying credit card service fees.
Another advantage with bitcoin is there are none of the chargebacks that some electronic payment services charge. Some electronic payment services can block payments and freeze funds.
Another benefit of bitcoin is security. In recent years, credit card users have experienced identity theft due to breaches at big corporations like Target Corp. and some banks. Bitcoin does not have a database of accounts that a hacker can breach.
Adam Pankow, Christine’s son, set up the salon’s bitcoin payment option. He said a customer can start to use bitcoin simply by linking a debit, credit or checking account to a U.S.-based bitcoin wallet like Circle or Coinbase.
Customers can pay with bitcoin simply by flashing their smartphone in front of a merchant’s computer screen.
Bitcoin Value Can Fluctuate
Adam Pankow said he has seen his own bitcoin increase in value. He purchased $100 worth of bitcoin and four weeks later noticed the value rose to $400.
(A reader posted a comment in response to this statement about rising value, pointing out that the value can go up or down. Adam Pankow responded that the price jumped from $240 to $410 from Oct. 4, 2015 to November of 2015.)
The Wisconsin Dells salon is one of many small merchants that have become bitcoin advocates in the past year.
Bronx Delis in Pontiac and Farmington Hills, Mich. has become a bitcoin supporter, CCN reported in July. Owner Marc Zuccato said he believes that by accepting bitcoin, he has tapped into a new market of younger, tech-savvy customers. One of his establishments has become a gathering spot for bitcoin enthusiasts. Patrons can pay for their meals with bitcoin using smartphones. An onsite bitcoin ATM sells bitcoins.
One Kick Nick’s Mixed Martial Arts Gym in Las Vegas allows students to pay with bitcoin, CCN also reported in July. The gym this past year installed a bitcoin ATM. Owner Nick Blomgren became interested in bitcoin after hearing his fighters talk about it. He sees bitcoin as a way to promote the fighters he sponsors.
Zen Palate, a vegan Asian restaurant in Midtown Manhattan, installed a bitcoin ATM on the premises where owner George Johnson said he expected to appeal to the area’s young, tech-savvy consumers, CCN reported in June.
How Fast Can It Grow?
These anecdotes demonstrate small and medium-size businesses are recognizing bitcoin’s advantages.
Software Advice, a software consultancy, reported in late 2014 that small-to-medium size businesses were not prepared to make forays into digital currency payments – even though it could mean increased sales. When asked how prepared they were to give their customers the option to make digital currency payments, half of the respondents to Software Advice’s survey said they were either not at all prepared while another 18% said they were “minimally prepared.”
Bitcoin payment processors such as Coinbase, BitPay, and GoCoin have partnered with companies like PayPal and Shopify to afford hundreds of thousands of businesses the opportunity to accept bitcoin payments.