Various merchants have jumped on board the Bitcoin bandwagon in the past few years, which at first, led to great success in terms of sales. However, it seems like Bitcoin purchases are becoming less and less frequent in numerous cases. Even gift card platform Gyft has seen a decline in Bitcoin revenue and a surprising uptrend in credit card transaction volume.
Bitcoin Outpaces Other Payment Methods By Quite A Margin
Gyft seemed to be the ideal platform to unify the power of digital gift cards and Bitcoin payments. Frictionless payments at low transaction fees are beneficial to both consumer and merchant, which has led to a Bitcoin cash back on every transaction for quite some time now. In fact, Gyft is one of the few merchants offering a cashback or discount to Bitcoin customers so far.
Back when Bitcoin acceptance was still relatively new for Gyft, virtual currency payments were used in nearly 9 out of every 10 transactions. Traditional payment methods, such as credit cards and Paypal, were outpaced by quite a margin in rapid succession. 2013 and most of 2014, has been quite successful for Gyft in terms of Bitcoin payments.
“The reason we started [accepting bitcoin payments for gift cards] is because I am a bit of a Bitcoin fanatic and being the CEO and co-founder is kind of one of those things where you build the company and its DNA around the things that you are passionate about,” – Gyft CEO and Co-founder Vinny Lingham told the media in an interview.
It has to be said, the acceptance of Bitcoin has been quite beneficial to Gyft and other merchants, other than in terms of transaction volume. Digital services, whether it is is gift cards or booking a flight and hotel online, have become major names in the world of everyday consumers. The fact all of these companies experimented with Bitcoin payments was an added bonus.
Despite its initial success, Gyft does not see Bitcoin as a currency just yet. At its core, Bitcoin is a payment method, but it will – technically speaking – never be a currency due to its lack of fungibility. Plus, pricing goods and services in a fixed Bitcoin value that is not tied to fiat currency values is next to impossible right now, due to the volatile price of this disruptive digital currency.
“It will get there, it may take five years to get there but it will get there and at that point it will be a very stable asset and the price fluctuation will be very minimal. I think we will get to the point eventually where you can use bitcoin as a currency, we are just nowhere close to that right now.” – Vinny Lingham continued.
Transaction Volume Dominated By Traditional Payment Methods Once Again
Similar to the shift in consumerism discussed by Destinia earlier this year, Gyft has seen a tremendous drop in Bitcoin transactions throughout the entire year. At the time of writing, only one in ten transactions on the Gyft website is paid in Bitcoin, which is in stark contrast to the virtual currency’s earlier successes.
Despite this decline, Gyft is not planning to remove the Bitcoin payment option anytime soon. The platform is serving a larger customer base than ever before, so it is only normal to see the number of Bitcoin transactions decline. Additionally, 10% of transactions are still being paid in Bitcoin, which is a very respectable number.
Gyft is a firm believer in the blockchain technology that powers the Bitcoin network though. The company is exploring options to store all of their digital gift cards on a public ledger, effectively transferring ownership of the card when a purchase has been made. This service is codenamed “Gyft Block”, but no official release date has been announced just yet.
Source: News Tip Via Email
Images courtesy of Gyft, Shutterstock