Why would a merchant accept Solarcoin? A partner recently asked why would a merchant accept solarcoin? Thought I would share the answer for those interested.
The currency acceptance issue is an interesting one and a classic chicken and egg scenario. Currency: a social protocol works most effectively when there are lots buyers and sellers willing to accept it.
Right now solarcoin is where bitcoin was in 2012 two years after launch. A small network, but growing quickly. Once a merchant perceives a personal benefit in signaling they accept Solarcoin they will. We have a small candle manufacturer accepting solarcoins and I even sold a few copies of my book for it. As the network grows, we anticipate uptake in SolarCoin but for now one needs a gateway service. see below.
There are 2 main benefits for a merchant to accept solarcoin, pending market growth etc. to a more critical mass.
1. Green goodwill as a marketing exercise. This is mostly a one off novelty effect for the merchant and has smaller appeal.
2. Cheap clearing fees. Many retailers operate on 3-8% net income margins. Visa, AMEX and Mastercard charge 1.5-3.5% for processing. So the impact to free cash flow >real ROE for a merchant can be significant 10-30% improvement. It is the reason gas stations for example give a cash discount or discount for debit cards.
Bitcoin is a useful example here. Bitcoin has roughly 3m users/acceptors. As of early 2015 there were 100,000 bitcoin merchants, there are probably more now as there is price stability and better services globally.
Gateway services:
1. SolarCoins can be converted into bitcoin and are traded 24/7.
https://www.coingecko.com/en/price_charts/solarcoin/usd2. There are many bitcoin debit cards which effectively transfer bitcoin into fiat during the debit card use. This works similar to what happens when a tourist spends money abroad with a credit or debit card. So effectively one can "spend" bitcoin anywhere they can use a debit card. Most likely as solarcoin grows, similar automatic transaction services will spring up. Expect it around 500k user network size.
Note that new SolarCoin wallets should include support for Android and IOS mobile wallets
https://copay.io/ These will be udnerway post 2.11 release.
Hope this helps.