Is it time Grocers Started Accepting Cryptocurrency?
Currently, there are over 1,384 cryptocurrencies available for simplicity in this post we’re going to focus on the most popular cryptocurrency, Bitcoin.
Back in the 1990s, when the internet was just getting revved up, a lot of retailers waited to get their websites. They thought maybe the internet was a fad or something only very tech-oriented people would use. Then Jeff Bezos launched Amazon in 1995 as an online bookstore. By 2000 when online sales were racking up more than $5 billion in sales, a lot of companies realized it was time to get a website. Is the same thing going to happen with bitcoin, the most popular cryptocurrency?
Many leading companies are banking that it will, including Expedia, overstock.com, Virgin Galactic and Dominos Pizza, but what about retail grocers?
The Opportunity for Retail Grocers
If you think about it there’s not a lot of difference from a shopper using bitcoin versus a credit card. Customers would pay for their purchase by scanning a smartphone-generated code with a tablet at the checkout counter. Funds would be immediately taken from the customer’s Bitcoin account and transferred to the store. Bitcoin also has low payment processing fees for small purchases.
Taking bitcoin would draw certain customers to grocers who might not choose them otherwise, though it’s hard to tell how many. Bitcoin is still a mystery and still constantly creating controversy.
The Trouble with Bitcoin and Other Cryptocurrency
Stories came out toward the end of 2017 that people were buying cryptocurrencies with credit cards and taking out mortgages because of a spike in the value, but since the price dropped after the first of the year chances are they’ll hang onto their bitcoin in hopes of better days.
Unlike other currencies, Bitcoin is still wildly volatile. The price traveled from about $900 in March of 2017 to nearly $20,000 at the end of 2017 and then back down again to around $9,000 (time of this posting). On the one hand, Bitcoin is getting a validity boost from some groups, like the Commodity Futures Trading Commission which has given employees approval to trade bitcoin. On the other, many banks and government agencies are banning bitcoin transactions, especially purchasing bitcoin with credit cards. And many governments around the world are alleging that they will start regulating Bitcoin and other cryptocurrencies. No one is quite sure where things will end up.
Also, sometimes the network gets sluggish-especially during peak trading times. One bitcoin owner said a $9 transaction took two days to process.
Another problem, for customers anyway, is that the IRS doesn’t treat bitcoin as currency but as property, so every transaction in which a customer uses bitcoin to pay is subject to a capital gains tax.
The Future of Cryptocurrency at Retail
Inc. columnist Erin Mack, argues Bitcoin will have its ups and downs in these early stages just like tech stocks did. But cryptocurrency is likely to become huge in the future.
On the other hand, even a change like taking credit and debit cards with chips has been a slow and sometimes painful rollout.
Retailers will have to watch closely to determine when the critical mass of crypto shoppers and social and governmental acceptance signal it’s time to jump in and accept cryptocurrencies and when that time comes grocers better be ready.