Bitcoin in business: Buyer's Best Friend
We talk with Adam Sah, founder and CEO of Buyer’s Best Friend and former Google employee.
Buyer’s Best Friend (BBF) is a retailer of artisanal food, high-end chocolates and gifts, sweet and healthy snacks. Since Sah founded the company in 2010, BBF has established three groceries in San Francisco: in the Ferry Building, North Beach and Haight-Ashbury. All three locations accept bitcoins, offer bitcoins in exchange for cash, and offer cash for bitcoins.
CoinDesk: We understand you are accepting bitcoin as a payment method. What are your other current payment methods? Are you open to the possibility of accepting other types of cryptocurrencies as well?
Adam Sah: We programmed our POS (point of sale) to accept bitcoins and also accept credit/debit (most popular), cash or check (almost nobody). Bitcoin is our favorite payment method – cash is a pain to count and handle, and credit cards charge large processing fees. Before we accept other cryptocurrencies, they would need to be as popular as bitcoin is with consumers.
CD: Why did you decide to accept bitcoins? Was it because you or an influential person in your company is a personal enthusiast, did a customer request it, or were you targeting bitcoin users?
Sah: We’re a young business and wanted to find ways to attract new customers. I'm a techie and heard about the growing community of bitcoin users, and also saw there were online directories such as bitcoin.travel and localbitcoins.com where you can connect with them. To me, that's all you need.
CD: How long have you been accepting bitcoins?
Sah: About a month.
CD: How exactly does your business do a bitcoin transaction? Is there any specific app or wallet that you prefer to use? Can transactions be immediately confirmed, or is there a lag time?
Sah: We confirm transactions immediately and let the customers move on – there are better hacks than stealing chocolate. It can take an hour to fully confirm a bitcoin transaction, which sure beats credit cards that take 30-60 days to fully confirm.
We recommend wallet apps from Coinbase, BitPay,and Blockchain.info, but most wallets work fine for us. I'm excited to test new paper bitcoins, and carry them as notes in the stores so our customers can buy them with cash.
CD: What exchange rate do you offer? What is this based on?
Sah: BFF changes bitcoin at the 24 hours’ average posted on Blockchain.info – we make our money by selling product, not pretending to be a bank.
We also offer two other services: “bitcoin back” from cash purchases and “cash back from bitcoin purchases,” both integrated with the POS. Bitcoin back means you can acquire bitcoins at the store with any purchase (we limit to around 1 BTC). Cash back means you can use BBF to exchange excess BTC you might have – this is limited to whatever cash we have on hand, which is rarely more than $200. Both are done at the posted exchange rate with no markup.
CD: How many customers are taking advantage of your acceptance of bitcoins?
Sah: It’s a small but influential percentage, and they're new customers -- probably one customer per day or so. Surprisingly, the bitcoiners have been very normal, average customers – neither going bananas (as we’d hoped) nor buying one tiny item (as we feared).
CD: What challenges have you faced when using bitcoins?
Sah: The only interesting challenge was one of software compatibility – QR codes don’t work well with all applications, and sometimes we have to switch payment methods, either BBF emailing a request for payment, or customers proactively emailing us the BTC. This slows down the checkout process.
CD: What do you feel the pros and cons of using bitcoins have been for you and your business? Has it been worthwhile for you?
Sah: It’s been great – so easy that I wasn’t even present for our first transaction, one of our staff just did it. It was no big deal either – they simply followed the instructions on the screen.
CD: What do you feel bitcoin needs to do in order to receive more widespread adoption?
Sah: The same things the experts are saying: higher global transaction rates, address deflation and hoarding, think through anonymity and the public chain, etc. Robert Macmillan of Wired wrote a nice piece about us, pondering the question of anonymity given the public transaction history.
I’d add that consumers need a reason to switch to cryptocurrencies from credit cards, which continue to outpace debit cards and AmEx because they help consumers manage the timing of their cash flows, provide an ombudsman service for disputes, and offer rewards.
CD: Do you feel bitcoin is here to stay?
Sah: Yes – I’ve been working in Silicon Valley for 20 years (and) have seen many trends, such as the rise of the web when Mosaic launched. I believe bitcoin has that kind of momentum, because it solves real, practical problems – lower transaction costs, independence from politically motivated government policies, increased security, and more. As a business operator, I think the lower transaction costs are a very big deal too.
CD: Is there anything else you'd like to say about bitcoin?
Sah: It's been a great experience – the bitcoiners are blown away that we handle bitcoin as easily as cash and credit card. There are no flashing lights, no fancy anything, it just works. And, it lets us get back to our passion, which is introducing people to amazing food.
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