Bitcoin fluctuates too much for merchants to accept

This is the eighth in a series of guest posts by Marco Streng, CEO and co-founder of Genesis Mining.

Since its emergence, the volatility of Bitcoin prices has always been high. It is not uncommon for the price to rise or fall by 10%, 20%, or even 30% in a day.

This volatility may prevent merchants from accepting Bitcoin. However, problems are also opportunities, and services that isolate this volatility have emerged. One such company is BitPay, which provides a quick solution to this problem, and BitPay is the largest payment processor in the industry, with $30 million in venture capital. Using the BitPay platform, Bitcoin payments can be instantly converted into fiat currency payments. This means that if a merchant receives $10 in Bitcoin, he can get $10 in fiat currency.

This instant conversion feature has led to over 90,000 merchants accepting Bitcoin, and the Bitcoin ATM space is growing rapidly. Well-known brands such as Expedia, Dell, Dish Network, Overstock, and Virgin now accept Bitcoin, with Overstock processing $15,000 in Bitcoin orders per day and Dell receiving $50,000 in orders in its first week.

There are other benefits that motivate merchants to accept Bitcoin:

Reduce merchant processing fees

Credit card fees range from 3-5%, while Bitcoin processing services charge 1%, with companies like Coinbase offering free processing for the first $1 million in transactions.

Fast payment

It takes 7-21 days for a credit card processing company to remit funds to a merchant. With Bitcoin payments, merchants can get funds within 24-48 hours of the transaction.

No Chargebacks

In the U.S., chargebacks cost merchants $500 billion and customers $5 billion. Once a Bitcoin transaction occurs, there is no chargeback.

International Customers

Merchants can receive Bitcoin payments as easily and instantly as they receive emails from anywhere in the world. Bitcoin enables merchants to accept payments from any country, without restrictions or delays.

New revenue streams

Bitcoin transactions have given rise to a new payment model, “micropayments,” that the existing financial system cannot support. The existing financial system prevents merchants from offering products for $1 or less online because of high fees. With the lowest transaction fee being 25 cents and a 3%-5% credit card processing fee, merchants find themselves paying nearly 30% in fees. Bitcoin enables these merchants to offer goods and charge only 10 cents, which could open up new revenue channels.