Various companies around the world are looking at ways to make Bitcoin more user-friendly for the consumer. And those efforts are badly needed, as most of the Bitcoin “educational” focus has been targeted towards merchants and how they would benefit from accepting digital currency payments. But if there is no interest from consumers to pay in Bitcoin, what is the point in doing so? And even though there are various solutions for consumers to spend Bitcoin in physical stores, not all of them are a perfect solution either.
Educating Consumers on Bitcoin Payments
To make Bitcoin a mainstream payment method, there needs to be a major educational effort towards consumers as to why digital currency is a viable payment option. Even though there are quite a few people around the world who have heard about Bitcoin, that does not mean they have ever used Bitcoin as a technology or as a payment method.
Back in 2014, the Bitcoin community has seen a tremendous increase in terms of the number of merchants accepting digital currency payments. Major names such as Expedia, Microsoft, Dell and Overstock.com enabled Bitcoin payments on their respective websites, which was a reason for cautious celebration in the community.
To this day, all of these platforms are seeing a few Bitcoin transactions taking places on a regular basis. But there is no mindblowing surge in Bitcoin payments either, as it is mostly used by some of the early adopters and people who have been involved in digital currency for quite some time. Rather than attracting a new influx of users to the Bitcoin ecosystem, existing users are finding new places to spend their coins.
And this brings us to one of the key issues with Bitcoin payments, from a consumer perspective at least. There is no clear incentive to use Bitcoin rather than traditional payment methods such as cash or card payments. Granted, Bitcoin is a convenient form of payment, and you can use a mobile device rather than carrying around a wallet.
But there is no real incentive to use Bitcoin over traditional payment methods either. Some merchants – in both the offline and online space – will give you a small discount whenever you use Bitcoin to pay during checkout. But not too many places offer that discount, and in the end, you pay just as much in Bitcoin as you would do in cash, or with a card.
Bitcoin is often touted as a great way for merchants to save on transaction fees. And while this statement is true – transaction fees with Bitcoin are non-existent – the consumer does not get to benefit from that. Most consumers won’t care whether or not a merchant has to pay a 3% to 5% fee per card transaction and even though they may know that Bitcoin payments remove that fee, it’s not a valid reason for them to switch to a new payment method.
Furthermore, using Bitcoin as a payment method via a mobile device is fun and convenient once you – and the merchant – get the hang of it. Just by completing a Bitcoin payment, you can truly experience how fast it is to send digital currency to someone else, and all it takes is a few taps of the screen.
Bitcoin Debit Cards – The Best of Both Worlds, Or Not?
There are other ways to spend your Bitcoin wealth in a convenient manner, both in an online and offline fashion. One of those “convenient” ways comes in the form of a Bitcoin debit or prepaid – card, which allows users to spend BTC wherever major credit cards are accepted as a payment method.
But there is one major drawback to using Bitcoin in the form of a card payment: it keeps using the broken existing financial infrastructure we could improve with blockchain technology. Credit cards were never intended to be used a payment method on a grand scale, especially not when it comes to online payments. And even though Bitcoin debit cards operate in a slightly different fashion, they are still prone to the same security flaws plaguing regular credit and debit cards.
On top of that, even though you as a consumer know you are spending Bitcoin through your debit card, there is no benefit for the merchant. They will still be forced to pay the card transaction fees. And depending on which currency your debit card is denominated in, you may end up paying conversion fees as well.
And that is not all, as these Bitcoin debit cards are not available to consumers in every country either. The United States, for example, are usually exempt from the list of supported countries, due to their regulatory approach of Bitcoin and digital currency. Plus, even if you use a “Bitcoin debit card”, it is still being linked to a bank account somewhere, even if it is not registered under your name. Thus, in a way, you are not harnessing the disruptive technology powering Bitcoin, but rather sticking to the financial system we all know and would love to change.
What we truly need in the Bitcoin world, is a larger educational focus on making consumers aware of the benefits of digital currency payments. And we also need to raise awareness for existing and new merchants to use the reduced transaction costs as a way to incentivize consumers to spend more BTC. Unless we can achieve both of those goals, Bitcoin will remain far removed from being a mainstream payment method.
What are your thoughts on using Bitcoin as a consumer, and what would you like to see changed in the future? Leave a comment below!
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