question: Why aren't bitcoin merchants incentivizing bitcoin use?

hollowframe

sr. member

Activity: 266

Merit: 250

Quote from: farlack on July 17, 2014, 06:36:46 PM

Quote from: hollowframe on July 17, 2014, 06:31:14 PM

Quote from: farlack on July 17, 2014, 02:36:03 PM

Quote from: electerium on July 16, 2014, 08:07:15 PM

Specifically I am asking, why arent savings being passed down to the consumer?

Just as there gas stations incentivize people to use cash, why are merchants generally refusing use of bitcoin as a method of payment.

Every single merchant is generally insulated and guaranteed against price fluctuations of bitcoin, but yet none of them seem willing to pass these savings onto the consumer.

Why?

Even if you advertise a discount of 0.5% it becomes a legitimate talking point and tool to demonstrate real world advantages over CC, no matter how diminutive savings are, they still become tangible. This becomes especially useful when crafting arguments for utilizing bitcoin.

As an industry and early adopters, we should demand that these merchants share their reduction in cost of transactions.

Because to have a merchant account its not free to accept bitcoin. It's 1% or something with bitpay. To get a credit card processor its 1%-3% depending on what you sell. So say its 2% for middle ground (which is actually high..) someone buys something that's $10, its 2% to process it, and usually around $0.25 fee. So its only $0.50 cheaper.
What incentive is that to use bitcoin?

Credit card processors usually charge a fixed amount (~$0.25) plus a percentage (I would say that even 2% would be low, I would argue that 2% would be the lower bound, and a more realistic rate would be ~3% on average, at least, and more if you are in an industry that has a lot of chargebacks.

It's more like 1-1.5% I just talked to 20 of them this week and every one of them said they can give me the cheapest rates or they will give me $500. Then they found out I sell ecigs, and its 3%. Which is pretty cheap.

That sounds very low to me. There must be some other costs involved in using their services if they are only charging 1-1.5% as banks will generally get at least the 1% that they give back to their customers via cashback reward cards, and the payment network (visa/mc) needs to get their own fee as well.

farlack

legendary

Activity: 1310

Merit: 1000

Quote from: hollowframe on July 17, 2014, 06:31:14 PM

Quote from: farlack on July 17, 2014, 02:36:03 PM

Quote from: electerium on July 16, 2014, 08:07:15 PM

Specifically I am asking, why arent savings being passed down to the consumer?

Just as there gas stations incentivize people to use cash, why are merchants generally refusing use of bitcoin as a method of payment.

Every single merchant is generally insulated and guaranteed against price fluctuations of bitcoin, but yet none of them seem willing to pass these savings onto the consumer.

Why?

Even if you advertise a discount of 0.5% it becomes a legitimate talking point and tool to demonstrate real world advantages over CC, no matter how diminutive savings are, they still become tangible. This becomes especially useful when crafting arguments for utilizing bitcoin.

As an industry and early adopters, we should demand that these merchants share their reduction in cost of transactions.

Because to have a merchant account its not free to accept bitcoin. It's 1% or something with bitpay. To get a credit card processor its 1%-3% depending on what you sell. So say its 2% for middle ground (which is actually high..) someone buys something that's $10, its 2% to process it, and usually around $0.25 fee. So its only $0.50 cheaper.
What incentive is that to use bitcoin?

Credit card processors usually charge a fixed amount (~$0.25) plus a percentage (I would say that even 2% would be low, I would argue that 2% would be the lower bound, and a more realistic rate would be ~3% on average, at least, and more if you are in an industry that has a lot of chargebacks.

It's more like 1-1.5% I just talked to 20 of them this week and every one of them said they can give me the cheapest rates or they will give me $500. Then they found out I sell ecigs, and its 3%. Which is pretty cheap.

hollowframe

sr. member

Activity: 266

Merit: 250

Quote from: farlack on July 17, 2014, 02:36:03 PM

Quote from: electerium on July 16, 2014, 08:07:15 PM

Specifically I am asking, why arent savings being passed down to the consumer?

Just as there gas stations incentivize people to use cash, why are merchants generally refusing use of bitcoin as a method of payment.

Every single merchant is generally insulated and guaranteed against price fluctuations of bitcoin, but yet none of them seem willing to pass these savings onto the consumer.

Why?

Even if you advertise a discount of 0.5% it becomes a legitimate talking point and tool to demonstrate real world advantages over CC, no matter how diminutive savings are, they still become tangible. This becomes especially useful when crafting arguments for utilizing bitcoin.

As an industry and early adopters, we should demand that these merchants share their reduction in cost of transactions.

Because to have a merchant account its not free to accept bitcoin. It's 1% or something with bitpay. To get a credit card processor its 1%-3% depending on what you sell. So say its 2% for middle ground (which is actually high..) someone buys something that's $10, its 2% to process it, and usually around $0.25 fee. So its only $0.50 cheaper.
What incentive is that to use bitcoin?

Credit card processors usually charge a fixed amount (~$0.25) plus a percentage (I would say that even 2% would be low, I would argue that 2% would be the lower bound, and a more realistic rate would be ~3% on average, at least, and more if you are in an industry that has a lot of chargebacks.

StevenS

full member

Activity: 206

Merit: 100

If the customer with bitcoin sells it for USD at an exchange (to use it to buy something from a non-Bitcoin merchant), he will pay the exchange rate plus an exchange fee. If he buys directly from a Bitcoin-enabled merchant he will pay just the exchange rate.

Therefore, a merchant accepting bitcoin is already giving an incentive to the buyer, by not charging them an exchange fee.

farlack

legendary

Activity: 1310

Merit: 1000

Quote from: electerium on July 16, 2014, 08:07:15 PM

Specifically I am asking, why arent savings being passed down to the consumer?

Just as there gas stations incentivize people to use cash, why are merchants generally refusing use of bitcoin as a method of payment.

Every single merchant is generally insulated and guaranteed against price fluctuations of bitcoin, but yet none of them seem willing to pass these savings onto the consumer.

Why?

Even if you advertise a discount of 0.5% it becomes a legitimate talking point and tool to demonstrate real world advantages over CC, no matter how diminutive savings are, they still become tangible. This becomes especially useful when crafting arguments for utilizing bitcoin.

As an industry and early adopters, we should demand that these merchants share their reduction in cost of transactions.

Because to have a merchant account its not free to accept bitcoin. It's 1% or something with bitpay. To get a credit card processor its 1%-3% depending on what you sell. So say its 2% for middle ground (which is actually high..) someone buys something that's $10, its 2% to process it, and usually around $0.25 fee. So its only $0.50 cheaper.
What incentive is that to use bitcoin?

DannyElfman

sr. member

Activity: 406

Merit: 250

Quote from: franky1 on July 16, 2014, 09:44:04 PM

Quote from: Brewins on July 16, 2014, 09:27:58 PM

They think bitcoin acceptance alone will be enough to attract the bitcoiners. Some even make more expensive to buy with bitcoins.

But there are some that offers discounts for payments with bitcoins, but they don't are the majority.

the ons offering discounts are those that hoard bitcoins for investment. overstock for instance hoards their coins as they can afford to..

but merchants that simply cash out 100% cant afford to offer a discount as that will cost them more then just doing credit cards. so DO NOT!!! expect all merchants to offer discounts. wait for them to realise the investment potential of hoarding, and they MAY offer discounts

Merchants could simply offer a discount that is lower then the cost of accepting credit cards.

To the OP, AFAIK most credit card companies have agreements with their merchants that prevent the merchants from charging a different prices for the same goods regardless if the customer is going to pay with a credit card.

counter

hero member

Activity: 798

Merit: 500

Time is on our side, yes it is!

I'd assume they feel it may be to complex and overly technical at this stage. Their is a lot of information to take in at first with BTC. It can seem overwhelming and maybe even time consuming I'd expect. Not to mention legally they don't no where they stand isn't very positive to all people looking into BTC.

jonanon

full member

Activity: 154

Merit: 100

When BTC is more widespread this may very well be the base but at the moment I can only see people accepting BTC if it is beneficial to themselves, not the consumer.

electerium

full member

Activity: 179

Merit: 100

Quote from: bitboy11 on July 17, 2014, 01:59:50 AM

When bitcoin goes commercial, then you can expect schemes such as those to become daily occurrences.

reduction in cost of transaction is not a scheme. savings associated with transacting through bitcoin are tangible for both consumers and merchants.

my question was purely rhetorical and aimed at raising awareness.

bitboy11

hero member

Activity: 534

Merit: 500

When bitcoin goes commercial, then you can expect schemes such as those to become daily occurrences.

BittBurger

hero member

Activity: 924

Merit: 1001

Quote from: electerium on July 16, 2014, 08:07:15 PM

Specifically I am asking, why arent savings being passed down to the consumer?

Just as there gas stations incentivize people to use cash, why are merchants generally refusing use of bitcoin as a method of payment.

Every single merchant is generally insulated and guaranteed against price fluctuations of bitcoin, but yet none of them seem willing to pass these savings onto the consumer.

Why?

Even if you advertise a discount of 0.5% it becomes a legitimate talking point and tool to demonstrate real world advantages over CC, no matter how diminutive savings are, they still become tangible. This becomes especially useful when crafting arguments for utilizing bitcoin.

As an industry and early adopters, we should demand that these merchants share their reduction in cost of transactions.

Because some of them (most of them) are opting to enjoy the cost savings instead.

That is, after all, probably the only reason they signed up for it in the first place. Especially the mom and pop shops.

-B-

ninhaobtcs

newbie

Activity: 1

Merit: 0

no，it is just the question of time.

Cicero2.0

member

Activity: 98

Merit: 10

★☆★Bitin.io★☆★

As said above time will sort this out. Getting our collective foot in the door is the first and most important step. Once they accept it and grasp the concept the incentive step is a natural one.

juju

sr. member

Activity: 381

Merit: 250

Quote from: electerium on July 16, 2014, 08:07:15 PM

Specifically I am asking, why arent savings being passed down to the consumer?

Just as there gas stations incentivize people to use cash, why are merchants generally refusing use of bitcoin as a method of payment.

Every single merchant is generally insulated and guaranteed against price fluctuations of bitcoin, but yet none of them seem willing to pass these savings onto the consumer.

Why?

Even if you advertise a discount of 0.5% it becomes a legitimate talking point and tool to demonstrate real world advantages over CC, no matter how diminutive savings are, they still become tangible. This becomes especially useful when crafting arguments for utilizing bitcoin.

As an industry and early adopters, we should demand that these merchants share their reduction in cost of transactions.

I believe coinbase is trying to help merchants provide lower prices for purchases done with bitcoin: http://www.coindesk.com/coinbase-merchants-offer-25-discounts-bitcoin-purchases/

Yakamoto

legendary

Activity: 1218

Merit: 1007

Well, on top of it being based on a lot of credit card user base v. Bitcoin user base, an incentive wouldn't be very valuable.

Most sellers only use BTC as an alternate for of payment, they canmt discount it because that means they'd be selling it for less than what they could get with credit cards, and that's not good in the companies eyes.

I do know of one website that offers a 2.89% discount for Bitcoin, but it also offer a 2.89% for everything except PayPal.

So in some ways, some companies are incentivising it, but you just have to look around. A majority do not.

franky1

legendary

Activity: 4410

Merit: 4766

Quote from: Brewins on July 16, 2014, 09:27:58 PM

They think bitcoin acceptance alone will be enough to attract the bitcoiners. Some even make more expensive to buy with bitcoins.

But there are some that offers discounts for payments with bitcoins, but they don't are the majority.

the ons offering discounts are those that hoard bitcoins for investment. overstock for instance hoards their coins as they can afford to..

but merchants that simply cash out 100% cant afford to offer a discount as that will cost them more then just doing credit cards. so DO NOT!!! expect all merchants to offer discounts. wait for them to realise the investment potential of hoarding, and they MAY offer discounts

Brewins

legendary

Activity: 1120

Merit: 1000

They think bitcoin acceptance alone will be enough to attract the bitcoiners. Some even make more expensive to buy with bitcoins.

But there are some that offers discounts for payments with bitcoins, but they don't are the majority.

franky1

legendary

Activity: 4410

Merit: 4766

Quote from: DeathAndTaxes on July 16, 2014, 08:13:10 PM

They don't have to ... yet. Right now anyone accepting Bitcoin for anything is rather novel. In time competition will force companies to pass some of the savings on to consumers.

+1

in early adoptor stage its best to get merchants onboard, saving them some money compared to credit cards. once they have used it a few times, seen the savings and know how easy it is to manage, then the consumer savings can happen.

after all if you were a shop owner and someone said.. i want you to accept bitcoins and offer a 10% discount... a merchant would not even bother accepting bitcoins purely because they dont understand it. and they feel they will be out of pocket.

but if you do it in baby steps.. slowly, allowing merchant to 1. accept it. 2. use it. 3 learn the benefits. 4 start hoarding it as they start seeing true value 5. offer discount because its in merchants interest to grab as many bitcoins to hoard for retirement as he can.

skipping to stage 5 is a huge leap of understanding..

pedrog

legendary

Activity: 2786

Merit: 1031

Some are and others will follow.

BTCisthefuture

sr. member

Activity: 364

Merit: 250

Certainly some merchants already are. I believer overstock does both for consumers and merchants selling with them. There's a few other places I can't remember off the top of my head that offer some small discounts if you use bitcoin.

As someone else above said, right now may places don't have to. The competition isn't forcing it yet.

Topic: question: Why aren't bitcoin merchants incentivizing bitcoin use? (Read 1460 times)