In 2014, the number of merchants accepting Bitcoin payments got a tremendous boost when major companies such as Microsoft, Dell, Overstock and Expedia joined the fray. However, less than a year later, not all of these companies are seeing the successes they had hoped for. Earlier this year, Overstock.com announced their digital currency holdings lost a lot of its value and now Expedia is reporting Bitcoin purchases are down by as much as 40%.
Dwindling Numbers Will Not Impact The Option To Pay With Bitcoin
Any company or retailer who is experimenting with a new payment method such as Bitcoin is bound to see some ups and downs along the way. While there will always be an initial excitement from the Bitcoin community, people cannot keep on purchasing things on a regular basis. Bitcoin is still a niche market, and unless the community grows, the number of commercial transactions for existing merchants will remain the same or go down over time.
In the case of Expedia, Bitcoin purchases have dropped by as much as 40% in recent months. However, that drop will not affect the option to pay for goods and services with Bitcoin, as Expedia plans to keep offering Bitcoin as an option for as long as there is a demand for it. Besides, not everyone is in the luxurious position to travel the world as a living either.
Despite the decrease in Bitcoin transactions, Expedia is one of the companies feeling less of the decline compared to other industries. Whether or not this has anything to do with the decline in Bitcoin price, or the ever-present hoarding problem, is unknown at this time.
Bearing in mind that the Bitcoin price was twice as high compared to today’s value when Expedia announced the integration of BTC payments, it should come as no surprise that people are watching the price rather than spending their coins right now. And with no notable changes in prices (other than a few peaks lasting for mere hours) there is no improvement in sight.
“We accept bitcoin on hotels only where we are a merchant of record. So for some of the hotels that we sell we are the merchant, meaning that you, as a customer are the one paying on our site directly when you are trying to book. Obviously at that point you are restricted to whatever the hotel can take. So if you try to pay with credit card we’ll still take it as a deposit if you are a no-show, but in those cases we would not be able to offer bitcoin because the hotel is the one that’s actually charging you.” – Expedia’s Senior Payments Product Manager Connie Chung told the media.
Low Consumer Adoption And Lack of Incentive To Use Bitcoin
From a consumer perspective, there is no clear incentive to use Bitcoin payments over traditional means such as credit cards. Even though merchants can save a lot of money on fees by accepting Bitcoin payments, the customer will not reap any benefit from that process. Nearly no merchant is actively offering a discount for Bitcoin customers.
As a result, consumers are not too keen on adopting Bitcoin payments at this time. Without the incentive to do so, Bitcoin adoption will struggle for many years to come. Once mobile payments become more generally accepted, Bitcoin adoption could see a huge boost around the world; but until then, the wait for a solution or incentive continues.
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Images courtesy of Expedia and Shutterstock