Payments VP: One Thing Stands Between Bitcoin and Mass Adoption
According to Alasdair Rambaud, senior vice president for payment solutions provider CardinalCommerce and a self-proclaimed bitcoin user, this is the only factor prohibiting bitcoin from mass adoption.
Rambaud believes that “most large merchants” in the US are currently looking into accepting bitcoin as payment, and that the reasons go far deeper than the publicity that can be gained.
Rambaud told CoinDesk:
“I don’t see any other barriers to mass adoption of this aside from the image. It’s easy to use, super transparent and you don’t have to take any risk as a merchant.”
The two-year CardinalCommerce veteran explains that this strong value proposition was what encouraged his company to partner with bitcoin processor Bitnet on 25th March. The deal enables any CardinalCommerce merchant to add a bitcoin payment option through its existing integration with its OneConnection service.
While positioning Cardinal at the forefront of alternative payment trends, however, the move followed what Rambaud described as 24 months of merchant demand for the offering.
“We started an inquiry and started asking other merchants. The feedback was definitely positive. They said it’s definitely something that was interesting,” Rambaud continued.
Though enthusiasm within the bitcoin business community may be waning for e-commerce as a pressing use case of the technology, Rambaud offered a different take.
In particular, he framed bitcoin as a compelling international e-commerce option, one that would allow larger merchants to increase overall business.
“Merchants, especially internationally, if they have an order coming from Nigeria with a credit card, they’re probably not going to accept it,” Rambaud explained. “But with bitcoin, there can be a different strategy, because it’s a guaranteed payment.”
Rambaud further stressed that large merchants have an incentive to reduce the high fees they currently pay to accept payment, suggesting that any solution that attacks this pain point is likely to spark interest.
“Merchants are looking at how they can lower their cost for accepting payment and they’re seeing bitcoin as a way to lower that cost,” he added.
Despite the number of alternative payments that have emerged in recent years, Rambaud said that bitcoin is pulling away from the pack by helping merchants avoid credit card fees and removing the need for currency conversion.
“If you look at Google Wallet, MasterPass, all the new ones are sort of the same and they don’t change the cost for the merchant,” Rambaud said. “All of those alternative payments don’t change the business model.”
Rambaud suggested that the ease of use promised by the products hasn’t proven enough to overcome the similarity of these payment methods to more traditional options.
Further, he explained that one of the key reasons he uses bitcoin is due to the high credit card fees he used to pay on his frequent travels to Europe from the US.
“I’m a French and US citizen, so I’m constantly using euros and dollars,” Rambaud said. “I found that using traditional methods of payment, these fees were pretty well hidden but fortunately I have a finance background so I was able to locate all of them and was not too happy with what I saw.”
Today Rambaud has two bitcoin wallets – one connected to a US bank account, the other to a bank account in Europe.
Key to lowering these overall costs, however, will be that merchants incentivize bitcoin use through discounts, something that Bitnet partner Rakuten recently did upon its bitcoin launch.
These discounts, Rambaud said, are likely to be an effective way to create what he called a “win-win” situation for merchants and consumers, even those who may currently believe the credit card rewards points are the most compelling offers.
“You have point junkies, but if you have a 2% transaction fee and you’re only getting 100 points, and someone else is saying we’ll give you 2% off for using bitcoin, I think you have a real value proposition. Your 2% that you’re going to give them is better than the reward they would get,” Rimbaud said.
Of course, promoting this activity as the best course of action for bitcoin merchants will be something left to Cardinal’s new partner, Bitnet.
“Now that we have a partner in Bitnet, they can explain the value proposition. We can engage the interest and they can come in with case studies around other merchants they have,” he added.
However, for now, Rimbaud suggested that the bitcoin industry should have one overall goal in mind, concluding:
”Anybody who’s working with bitcoin needs to work on the image of bitcoin.”
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