There has been a great deal of controversy surrounding the virtual currency bitcoin as a growing number of quick-serve restaurants, bakeries, coffee shops and bars are accepting the digital currency from their customers as payment for their food and beverages.
Bitcoins are a currency that is transferred directly between buyer and seller typically via digital wallets, eliminating the need for bank transaction fees. The currency’s value is based on an ever-changing algorithm. Because the global bitcoin market is unregulated and anonymous, opponents say it is an ideal way for criminals to hide stolen goods and drug transactions. The merchants who are using the payment system argue that it is a secure and convenient way to process sales, and it saves them on credit card transaction fees.
Bitcoins Pay for Durham Donuts
Rise, a biscuit and doughnut shop in Durham, North Carolina, began allowing its customers to pay using the virtual currency in late February, and quickly garnered attention from local media and current and prospective customers. “We are right by the universities and we have a lot of techie customers to begin with, but some others wanted to come in just to use bitcoins,” says Tom Ferguson, owner of Rise and Durham Catering Company. “We are the first business in our area to start using bitcoins.” Ferguson also started accepting bitcoins, he says, because he doesn’t want to keep paying banks. “Why am I paying money to the banks when the price of products are going up and we raised the minimum wage?” he says. “We have to get rid of these middlemen all over the place.”
Saving Money Per Sale
Rise pays one percent of each transaction because it uses a third-party provider, CoinBase, that converts bitcoin currency into U.S. dollars and deposits it in the company’s bank account nightly. Credit-card transaction fees for its point of sale, on the other hand, are around 2.75 percent and can be more. Each transaction is fairly simple and quick, similar to a credit-card transaction; a customer simply takes a picture of a barcode at the POS and the transaction is completed.
Already Out There
Major online retailers like Overstock.com and Tiger Direct are already accepting bitcoins. There is a lot of growth potential in this. Eventually (though not anytime soon,) it will turn into paying your employees and vendors in bitcoins. At this point, bitcoins are more of a novelty used by only a handful of customers who are among the more tech-savvy.