Cryptocurrencies are all the rage in tech news right now. The name on everyone’s lips is bitcoin, the only liquid cryptocurrency on the market. But in a recent article, Andrew Lee, co-founder of Amazon-based bitcoin marketplace Purse, voiced what’s on many peoples minds: “there’s this huge lack of consumer incentives [to use bitcoin]. [...] Why use bitcoins if you have PayPal or if you have a credit card? It’s hard to imagine my mom getting excited about bitcoin.”
It’s true - there are more than a few factors that make the use of this cryptocurrency more complicated than your everyday currency: Its volatility, taxation issues, its legality in different countries, and the fact that it is not easy to convert large sums of money from bitcoin back to normal currency.
Unsurprisingly, the past two years have seen a surge in the popularity of startups that are attempting to make bitcoin more mainstream. Many online marketplaces, ecommerce platforms, etailers and retailers are now entering into partnerships with them.
Shopify, the ecommerce platform supplier of over 75’000 merchants, started accepting bitcoin via US-based payment processor startup Bitpay in late 2013. Paypal has also announced partnerships with BitPay, CoinBase and GoCoin. The startup Gyft lets its customers use bitcoin to buy gift cards from Victoria’s Secret, Aeropostale, Zappos and more, and those fortunate enough to know about it were able to buy tickets to the December Victorias Secret Fashion Show on BitPremier, a bitcoin marketplace for luxury items. Another startup named Bitfash enables customers to use bitcoin to buy items from fashion retailers such as ASOS, ZARA and Forever 21.
Who else is giving bitcoin a go?
Reeds Jewelers: This retailer also accepts bitcoin payments in the US through a partnership with Coinbase. They report that their decision to do so has proven rather fruitful - transactions handled with bitcoin are on average significantly higher than the average order values.
As Dominic Frisby, co-founder of Queueco and author of Bitcoin: The Future of Money? told Decoded Fashion: "Now is the right time to be learning about the system. As for whether now is the right time to be investing significant amounts of investment capital in bitcoin, nobody knows the answer to that question for sure. Whether bitcoin itself succeeds or not is unknown, but the tech behind it will change the way the internet works. The benefits of bitcoin [for the average consumer]? Privacy, speed of transfer, economy of transfer."
Benefits specific to the retail space include reduced processing costs, lower transaction rates and easy global transmission, but is the fashion industry ready to buy in?
Reported by Anna Abrell