Does Accepting Bitcoin on Your Website Make You Look Unreliable?
If you’re an online marketer, you know how important it is that your e-commerce website has a polished look and feel at all times. The last thing you ever want to be accused of is looking unreliable or illegitimate. Consumer perception is everything, and if there’s even a single whiff of unprofessional content or behavior on your site, this could cause prospective customers to avoid using your site.
Maintaining consumer confidence is a major component of running any successful e-commerce brand. Part of that process involves deciding which forms of payment your site will accept; for many online retailers, the tried-and-true methods for electronic payment have always been debit or credit cards. Yet there’s a new kid on the block when it comes to online payment methods – cryptocurrency. But is it a good move to accept digital assets like Bitcoin?
Sending the Right Message
In theory, cryptocurrencies like Bitcoin are ideal for e-commerce. A digital currency that exists exclusively online, Bitcoin was built to be exchanged across websites safely, securely, and transparently, making it easy to send and receive payments for goods and services. Yet there are some problems that online retailers face when it comes to integrating Bitcoin – or any cryptocurrency – as an accepted payment, primarily whether this sends the right message to your customers.
Using cryptocurrency for online payments is a divisive subject. As Bitcoin is the oldest, largest, and most famous of these digital assets, it’s also the currency that gets the most heat from crypto detractors – and that means using it as an accepted payment method for your e-commerce site could expose you to some backlash amongst current or prospective customers who feel using Bitcoin makes your site unreliable. While much of this is a natural reaction to something new and different that customers don’t understand, there are some issues that you do face when accepting Bitcoin as an online payment option.
It’s Not All a Matter of Perception
Most people don’t trust Bitcoin – or anyone who uses it – either because they’ve heard bad things about it or simply because they don’t know how it works. While there’s little you can do to change the perception of customers who have already been fed specific information from outside sources, it’s true that there are some disadvantages to using Bitcoin. This means it’s not just a matter of perception – there are a handful of flaws when it comes to accepting any cryptocurrency.
The most obvious issue is that of volatility. Its value is in constant flux; this was made obvious in December of 2017 when Bitcoin rose as high as $19,000 per coin only to plummet to just over $12,000 per coin in a matter of weeks. While much of Bitcoin’s value has recovered since then, fluctuations of more than $1000 in value are common. Any e-commerce site that makes the decision to use what consumers see as such an unstable currency is also often seen as perhaps not a safe place to do business.
This has resulted in some blowback among e-commerce sites that had previously made the decision to accept Bitcoin as a valid payment. While many of the early adopters like Microsoft and Overstock have been sticking to their guns, others have had to rethink their decision. One such example is how Valve’s online gaming e-commerce platform Steam, long a proponent of Bitcoin, made the decision in late 2017 to no longer accept the cryptocurrency. Valve cited Bitcoin’s volatility as one reason behind its decision to remove the ability to purchase products from its platform.
The Real Flaws in Using Bitcoin
The high level of volatility that Bitcoin has demonstrated is indeed a problem, especially when e-commerce platforms that have used it for years are pointing to it as reasons for not using it. Yet it’s more of a symptom than anything else. In fact, the biggest flaw at the core of the cryptocurrency – and one that can and should concern online marketers considering whether to integrate Bitcoin into their e-commerce site – is its lack of scalability. The problem, unfortunately, is hard-wired into Bitcoin on a molecular level: the Bitcoin blockchain, as programmed, can only handle around 7 transactions per second.
This is laughably low. Compare this to the number of transactions a payment processor such as Visa, which can handle 24,000 transactions per second, and it’s fairly obvious that as Bitcoin continues to grow in popularity, transaction bottlenecks will contribute to long processing times and ballooning transfer fees, two things that were completely nonexistent when Bitcoin was less popular. In other words, the cryptocurrency’s very success could lead to its downfall – and using it as a payment option on e-commerce sites might hasten that downfall.
Overcoming Reliability Issues
The irony is that the more successful Bitcoin achieves, the less reliable it has the potential to become. This means that, in the current environment, it may be beneficial for e-commerce sites to hold off on integrating Bitcoin as a payment processor, both to ensure that consumer perceptions don’t skew against your site and also to provide time for the Bitcoin community to resolve the underlying issues that are materially contributing to its unreliability. Thankfully, efforts are underway to revamp the Bitcoin blockchain to increase the number of transactions the system can handle per second.
It may be some time before these changes go into effect. However, once they do, the transaction slowdowns and out-of-control processing fees being experienced by Bitcoin users today will diminish and possibly even be eliminated completely. This might even lead to the knock-on effect of the price volatility of Bitcoin subsiding as well, as there will be less speculation on what the future holds. Once these efforts are successful, there’s almost nothing to stop a savvy online marketer from choosing Bitcoin as an additional payment option for an e-commerce site.
So will accepting Bitcoin make your e-commerce site look unreliable? The answer to that depends. Integrating Bitcoin now could lead to problems in the future, while waiting until the problems with the platform are resolved may be your best bet.
Author: Catherine Tims is a freelance writer for Bitcoin Exchange Guide. After receiving her Master’s degree in English Language and Linguistics at the University of Arizona, she taught writing to graduate students at the University of Illinois/Champaign-Urbana. She has her own writing business, Ivy League Content, and freelances full time for business clients who need highly-researched articles.