As we’ve shared many times, getting small businesses to accept bitcoin as a mainstream payment method is going to be an uphill struggle for backers of the cryptocurrency. According to Bloomberg, that acceptance challenge is taking place among big businesses, as well. Despite a recent surge (and then, fall) in the value of bitcoin, the number of major online merchants accepting Bitcoin is still less than one percent.
“Retailers were already skeptical about letting customers pay with bitcoin before the cryptocurrency’s price underwent an astronomical rally this year,” reported Bloomberg. “That rapid surge hasn’t made retailers any more accepting. In fact, it may have done the opposite.”
0.6% | Percentage of the top 500 online merchants that accept bitcoin
Only 3 of the top 500 online merchants tracked by the e-commerce publication, Internet Retailer, accept bitcoin. Last year, the number was five, according to Morgan Stanley payments analyst James Faucette.
Quote | James Faucette from a Morgan Stanley report (July 11, 2017)
“Bitcoin owners are reluctant to use the cryptocurrency given its rate of appreciation, more evidence that bitcoin is more asset than currency. It is way easier to trade speculatively than convince new merchants to accept the cryptocurrency.”
Bitcoin’s challenge among retailers
The hesitance among retailers may also be linked to bitcoin’s scaling challenges, as transactions become slower and more costly, Faucette added.
Some users of the cryptocurrency no longer see the point in using bitcoin for small purchases given increased transaction fees, Atlantic Financial founder Bruce Fenton said in an interview last month. “There’s a problem with the fees being so high — it does price out certain things,” said Fenton, who is a board member of the Bitcoin Foundation. “There are some micro transaction uses cases — a cup of coffee is the big analogy everybody uses — that are being priced out just because bitcoin is going up so much.”
Bitcoin ≠ Blockchain
As in our previous coverage of bitcoin, we will remind readers that bitcoin is a non-regulated currency (asset) while Blockchain is the software and encryption approach that enables it. Blockchain can be used for other cryptocurrencies. Many companies are springing up that use Blockchain. Our coverage of cryptocurrencies does not imply any endorsement of investments involving cryptocurrencies. We are tracking this issue because small business owners continue to be approached about accepting cryptocurrencies for payments.