I see the current Filipino bitcoin exchanges developing in two main directions over the near term; processing overseas remittances, and providing BTC to PHP conversions for Filipino businesses.
The current biggest growth potential for the exchanges is in remittances. As this Pera Padala business development grows, I believe that these exchanges need to start shifting their focus on getting Filipino businesses to start accepting bitcoin for payment of goods and services. This is not going to be easy and will take a lot of "leg work".
Once a Filipino merchant has been convinced to accept bitcoin, he/she then needs internet access at the point-of-sale (POS) and a smartphone/tablet/PC with suitable wallet to accept/tansact the payment. I see it working this way:
1. Business gives the customer the price converted to BTC at the current exchange buy rate.
2. Customer logs on to WiFi at POS and sends the BTC to the merchant's wallet QR code displayed at the POS.
3. The merchant checks the payments confirmation(s) in his wallet and, once suitable confirmation is received, passes over the goods/service paid for to the customer.
4. At (say) the end of the day, the merchant uses his bitcoin exchange to convert the BTC takings into PHP and have that deposited into his/her bank account within 8 business hours.
One of the problems here is the confirmation time. This is mainly to prevent "double spending". It would be up to the merchant to determine what is an acceptable confirmation. For smaller transactions, just being seen by one or two peers may be sufficient confirmation, taking just a few seconds. The larger the transaction, the more confirmations would be needed, taking more time.
Another problem is the exchange rate volatility, which can go up as well as down.The bitcoin exchanges offer a few ways to eliminate this volatility.
The advantages for the merchant include:
- No credit/debit card fees/commissions.
- Less work/costs associated with handling cash.
- Good business promotion - at least initially while few merchants accept BTC.
Now, if only SM would accept BTC!