Argentina-based e-commerce company Avalancha has announced it will now accept bitcoin through a new strategic partnership with bitcoin merchant processor BitPagos and Latin America-focused bitcoin exchange Bitex.la.
Avalancha, which launched in May, aims to provide Argentinian consumers with a convenient buying option for electronics and home appliances, and it sees bitcoin as a key investment that will help it better serve its growing customer base.
Miguel Klurfan, CEO of Avalancha, told CoinDesk his company is focused on giving online shoppers a greater degree of convenience, and that Argentina’s credit card processors simply add too much friction to the buying process.
“Paying with bitcoin is seamless, while […] payment processing companies in Argentina are not so well prepared for online business. That’s why we are very interested in developing bitcoin as soon as possible.”
Klurfan went on to express his hope that Avalancha’s decision will be as beneficial to bitcoin, which has grown increasingly popular in the region amid concerns about the country’s financial status.
“For Argentinians that may be hesitant about bitcoin, hearing the news that you can buy a refrigerator with bitcoin will encourage them to increase the adoption of the currency,” Klurfan noted.
Avalancha has earned $10m pesos in revenue since its launch, with the goal of earning $25m pesos by the year’s end.
Inside the partnership
As part of the deal, Avalancha will use BitPagos as its payment processor, providing bitcoin users in South America with the ability to purchase a wide range of goods with bitcoin from major brands that include Nintendo, Samsung, Whirlpool and more. Bitex.la’s role will be to help sell some of the bitcoins Avalancha receives for US dollars at the company’s request.
Members of Bitex.la and BitPagos say that Avalancha sees bitcoin as a payment tool that will help encourage consumer spending, and one that positions the company for long-term growth.
Klurfan was also optimistic about his selection of partners and their enthusiasm for the project, saying:
“We see ourself as a technology company and everyone on our team is young and an early-adopter. We made a really good match with the guys from Bitex.la and BitPagos.”
BitPagos raised $600,000 earlier this year from investors including bitcoin hedge fund Pantera Capital, Bitcoin Investment Trust CEO Barry Silbert and Silk Road auction winner Tim Draper. Likewise, Bitex.la launched in May with a $2m investment to provide bitcoin exchanges services to Latin American markets.
Christian Nubis, chief product officer at Bitex.la, explained that the move benefits Avalancha by providing the company with a compelling way to attract new consumers, explaining:
“The entire consumer electronics and appliance space is very competitive and they always want to be ahead of the curve. A lot of these retail chain stores have been looking into bitcoin in order to have a competitive advantage over the competition.”
Fran Buero, the company’s chief operating officer, elaborated further, suggesting that the partnership will allow Avalancha to receive money faster than if it waited for credit card payment, while protecting the company from inflation.
“If Avalancha sells a washing machine and the consumer pays with credit card, inflation is so high they might end up losing money, because with the money they get 20 days from now, the washing machine might be more expensive, at least with the current situation in Argentina.”
Argentinian consumers have been said to be turning to bitcoin as a solution to inflation in recent years, although figures for adoption in the country aren’t widely known.
Still, while consumer adoption has been allegedly strong, merchant adoption has lagged behind owing to uncertainty around potential bitcoin regulation and worries that Argentina could crack down on bitcoin in moves that echo recent decisions in Bolivia and Ecuador.
Ready to spend
However, given that many Argentina-based bitcoin consumers are using bitcoin as a way to guard against inflation, it remains to be seen whether they would be comfortable spending it given the opportunity.
Klurfan, however, is optimistic about the new initiative, dismissing suggestions that Argentina’s consumers might be seeking to simply preserve value in bitcoin, saying:
“I know that there are not so many Argentinians holding bitcoin right now, but I believe those who do would be really really excited about it.”
Nubis suggested that this concern may be unwarranted. Bitcoin, he asserts, will actually provide a powerful incentive for spending by making it easier for consumers to tap wealth that may be stored outside of Argentina:
“It will be very compelling for people to spend bitcoin for a number of reasons. […] If you have to bring money into the country, it’s very expensive if you want to bring small amounts, whereas buying bitcoin overseas is quite cheap and using that directly for payment is also very convenient.”
He added: “We think a lot of people are going to find bitcoin a more convenient way of buying electronics and home appliances.”
Image via Avalancha