It has been less than two months since e-commerce giant Overstock.com began accepting bitcoin payments on their website, and the online retailer has already surpassed $1m in total sales.
Overstock's CEO Patrick Byrne confirmed the company's plans to embrace bitcoin back in December, and bitcoin payment processing officially went live on Overstock.com on 9th January.
Byrne spoke with CoinDesk about its $1m milestone, asserting that while the initial surge of bitcoin sales did subside, there has since been steady growth in bitcoin payments:
"In the first day there was an enormous surge of bitcoin sales, but we've also seen a gradual building of bitcoin sales in a week-by-week basis."
The initial projections for sales processed with bitcoin on Overstock.com this year was set at $3-5m, but this figure has since increased dramatically, according to Byrne.
The CEO now predicts that Overstock will see a total of $10-15m in bitcoin sales this year, and suggested that this number could reach as high as $20m if bitcoin sales maintain their current growth rate.
Overstock partnered with Coinbase to process bitcoin payments, and together the two companies have compiled and released data that shows the spending habits of bitcoin users on Overstock, notably comparing them to credit card users.
The findings show that customers who use bitcoin as a payment method spend on average $58 (34%) more on their orders than customers using credit cards.
Byrne says that Overstock has reaped the benefits of accepting bitcoin as a payment method, most notably in regards to eliminating chargeback fraud from credit card payments and reducing payment processing fees:
"Bitcoin payments have helped us avoid fraud in the form of chargebacks with credit cards, and we're also able to get paid faster than when payments are processed with credit cards.
It takes three days for payments to finalize with credit cards, and with bitcoin we can get paid immediately."
While Overstock is credited as the first major online retailer to accept bitcoin payments, they're not alone when it comes to reputable companies embracing bitcoin. TigerDirect began accepting bitcoin payments in late January, and companies like Virgin Atlantic and Reddit have helped further legitimize the digital currency as a convenient and secure payment method.
Speaking on the recent news of Overstock’s $1m bitcoin sales milestone, Coinbase noted that while they’re excited about the growing number of transactions being processed with bitcoin, they’re certainly not surprised:
“We are more gratified than surprised with these recent milestones, as they illustrate our belief that we are near a tipping point for broad merchant and consumer adoption of Bitcoin.”
Byrne hopes that the news of Overstock surpassing $1m in bitcoin payments will continue to build the currency's credibility and adoption rates, noting that many customers are switching from competing commerce sites to shop with bitcoin on Overstock:
"I've seen the bitcoin community really embrace Overstock and I've read about many cases of our customers coming over from Amazon specifically to shop using bitcoin.
I think that bitcoin payments will account for several percent of all online transactions in the next year or two, and when this happens, Amazon will be forced to start accepting bitcoin on their website."
With the amount of sales being processed with bitcoin steadily growing on Overstock, Byrne noted that the company has recently changed its business model and will start to hold "5-10% of [their] processed bitcoins in reserves."
Given the option that Coinbase offers its merchants to immediately convert bitcoins to fiat currency, this move is a symbol of Overstock's confidence in the principles of bitcoin and its utility as a means for buying goods and services online.
Image credit: Overstock.com