Expedia's Connie Chung: Purchases With Bitcoin Are Down 40%
Expedia's Connie Chung, senior payments product manager, speaks to CoinDesk about the travel giant's bitcoin payment integration.
Despite a decline of approximately 40% in bitcoin purchases, Connie Chung, senior payments product manager at Expedia, says the option to pay with the digital currency will remain as long as there is a demand for it.
In interview with CoinDesk, Chung, who helped launch bitcoin payments for Expedia's US website last year, says the decision to accept payments in the cryptocurrency was also a response to demand, and that this is perhaps the most important factor in its selection of payment methods.
It was not, she added, about Expedia making a statement or taking a stance on digital currencies.
She told CoinDesk:
Chung noted other merchants had been more affected by what she called a recent decline in bitcoin payments – with some reporting a decrease of up to 90% at various industry events.
For Chung, the general drop in payments can be correlated with bitcoin's declining price, a reasoning that appears in line with the current narrative about declining interest in bitcoin as an e-commerce tool among major merchants.
To put this into context, according to CoinDesk's BPI, bitcoin's price stood slightly over the $600 mark at the time of Expedia's integration in June 2014. Since then, the digital currency has seen a somewhat dramatic – and widely reported – price drop, hovering mostly around $200 since the beginning of this year.
CoinDesk's recent State of Bitcoin report found that the number of new bitcoin-accepting merchants continued to increase in the second quarter of 2015 but that this growth was below levels seen in previous quarters.
According to the report, the fundamental challenge facing bitcoin as a medium of exchange of legal goods continues to be low consumer adoption and a lack of advantages over credit and debit cards.
However, more niche use cases – such as in international e-commerce – continue to remain of interest to merchants in the e-commerce space.
Expedia's bitcoin payments offer – only available for hotel reservations – is restricted by the nuances of the company's role in the travel industry, said Chung.
"We accept bitcoin on hotels only where we are a merchant of record. So for some of the hotels that we sell we are the merchant, meaning that you, as a customer are the one paying on our site directly when you are trying to book," she continued.
In these cases, Chung noted, it was possible to offer the bitcoin payment option to consumers because the payment was made directly to Expedia. For 'pay-later' hotels – where guests are expected to settle their bill at the venue – that's a different story.
"Obviously at that point you are restricted to whatever the hotel can take. So if you try to pay with credit card we'll still take it as a deposit if you are a no-show, but in those cases we would not be able to offer bitcoin because the hotel is the one that's actually charging you."
Here she suggested that the lack of overall understanding regarding bitcoin was again an inhibiting factor. "If we give them a bitcoin payment, they don't know what to do with it, it's not a currency they understand."
In terms of airline ticket purchases, Chung explained that Expedia acts as an agency, passing on payment information to the majority of airliners. Similarly to 'pay-later' hotels, in these cases, Expedia can only accept the payment types accepted by the airline.
Is this a problem native to the payments industry? Chung doesn't think so. It is, she said, a problem in the way that the suppliers are set up in the payments sector.
Aside from noting the growing interest in mobile payments, Chung placed special emphasis on frictionless payment methods.
Citing car-ride sharing service Uber – which has no checkout – and PayPal's One Touch service – which eradicates the need for the user to login every time they wish to make a payment – as examples, Chung noted how consumers are looking for easier options.
Although Chung said the payments space is already moving in the direction of frictionless payments, she suggested that security concerns could potentially hamper this progress. "I think the payments space sometimes, you know, people are really afraid of security lapses."
As for how bitcoin as a technology could grow to become a larger part of Expedia's operations, Chung was less specific in her responses, saying:
Image via Connie Chung
Connie Chung is speaking at Consensus 2015 in New York. Join her at the TimesCenter on 10th September. A list of the event speakers can be found here.
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