Bitcoin for business?

[GlennDrake]

Just interested to know if anyone has considered adding a Bitcoin payment solution to their offering? I've spent some time over the holiday period reading about Bitcoin and trying to decipher the technology that underpins the service. I have to say the decentralised, stateless, bankless nature of Bitcoin is very compelling!

 

[PuChCo]

Bitcoin is interesting and services like Coinbase make it pretty easy to accept as a business. That said I'm still unsure how you'd report bitcoin revenue to the HMRC. Do you even need to if you don't convert it to GBP?

Really though I just wish I'd invested in bitcoin a few years ago. I'd be on the beach by now!

 

[antropy]

I must admit Bitcoin is very interesting as a currency. It does seem really quite volatile though, with massive ups and downs!

Still, nice to see there's a gateway for OpenCart:
http://www.opencart.com/index.php?route=extension/extension/info&extension_id=12149

I think the percentage of Bitcoin sales on most sites would be pretty low though i.e. less than 1% depending on the products sold.

 

[GlennDrake]

HMRC initially labelled Bitcoins as "taxable vouchers" which would mean any transfer would be subject to VAT. This rather clumsy labelling single-handedly renders Bitcoin useless in any sort of e-commerce context.

The good news is that HMRC are now rethinking their position on this, following a meeting with a bunch of Bitcoin proponents. I have read elsewhere (but not been able to verify) that HMRC have since advised that a tax liability will arise at the point Bitcoins (or other ******-currencies) are converted to currency. But if Bitcoin does become ubiquitous as a currency then surely you will be able to use any gains to directly acquire goods/services and avoid the need to convert to currency and thus incur any tax?...There must be a few people in HMRC scratching their heads over this! I'd love to see some clarification on this but there's zero guidance on HMRCs website right now.

The volatility aspect is a problem for e-commerce applications, Just in the last 24 hrs the price has gone up 7% and it can quite easily go the other way to a much greater degree. You'd need a way to cash out Bitcoins at the end of each day to mitigate the risk.

I agree with @antropy the uptake would be pretty small right now, but there are a growing number of Bitcoin owners looking for ways to spend them.

2014 will be an interesting year for Bitcoin!

 

[owas]

Just over year ago, a friend was doing his best to get me to invest in bit coins and I almost did, every time I read about it I could hit my head on the desk.
With regards to taking it as a form of payment via your website, I would worry that it ran the risk that a potential customers (a non bit coin user) may associate your site with something like silk road, and untrustworthy etc. In past few months the criminal side/use of bit coins as overshadowed the rise in value in the media.

 

[GlennDrake]

I would worry that it ran the risk that a potential customers (a non bit coin user) may associate your site with something like silk road, and untrustworthy etc.

I did think the same! Although Overstock.com recently declared their intention to offer a BTC payment option in 2014. I think as bigger retail properties get involved this will further legitimise and stabilise Bitcoin. Richard Branson will also allow Virgin Galactic customers to pay with Bitcoin, although this is probably more of a way to grab headlines than anything else! He's pretty adept at that!

@owas sorry to hear about that! But you can't feel as bad as that guy in Newport rummaging through a landfill I can't post the link, but Google it..it makes you want to cry!

 

[MartCactus]

I've been crazy about Bitcoins since I first came across them 2-3 years ago. I did invest, but only a couple of hundred quid - even so, that is worth a fair amount today!

We've integrated Bitcoin with our Kartris shopping cart software. Rather than take the easy option and just integrate with an online service, we have a native integration with the Bitcoin client itself. This means you're not reliant on any third party provider to process the Bitcoins for you - quite a bonus considered that these services appear and disappear with alarming regularity, charge a fee (albeit smaller than credit card payments) and have sometimes fallen victim to thefts of all their Bitcoins.

More about our Bitcoin integration here...
http://www.kartris.com/Kartris-v2.5---responsive-interface-and-Bitcoin-support__n-33.aspx

At present Bitcoins value are volatile but I expect over time as the market grows it will stabilize. Bitcoins offer so many great advantages over existing payment methods

• no third party involved, negligible fees
• no chargebacks
• no currency conversion if you plan to spend or save Bitcoins (eventually I'd hope to be able to use them to pay some of our suppliers!)
• ability to have anonymous transaction (if purchase is virtual/downloadable), so save customer the time and perhaps embarrassment of entering their name and address required with credit card

Not to mention the advantages for society/the world

• No banking system to fall prey to sanctions - trade with who you like even if they are in Iran, etc, or transfer money to Wikileaks even if the Feds pull their Paypal account
• No unlimited printing to fuel inflation and erode your savings
• Ability to trade with anyone, anywhere who has an internet connection
• Relative anonymity

 

[Jeff FV]

Bitcoins offer so many great advantages over existing payment methods

• no third party involved,
  
• no chargebacks

But these are advantages for the retailer, not the customer, and are indicative of why (at least for the forseeable future) Bitcoin will only be a fringe player in eCommerce.

eCommerce (or, more correctly, successful eCommerce) is built on trust and confidence and that is why customers choose to use PayPal and Amazon etc. because they know that if there is a problem they will be on your (the buyers) side. What recourse does the buyer have if they use Bitcoin? None, and for this reason most people won't choose to use Bitcoin for eCommerce.

J

 

[Latebloomer]

Bitcoin can't buy my lottery tickets. It is also too volatile to rely on and perhaps I will only use if I have enough reserves to take massive hit when the value falls.

 

[Brandsumo]

Implementing a solution like Bitpay or Coinbase means you can immediately have the transfer of Bitcoin/Currency carried out, and you get the best market rate at the time, in your currency, and the Bitcoin price automatically fluctuates to match your GBP pricing - The fees are also very low, and there's no risk of chargebacks nor exchange rate fees.

You'll never actually 'hold' the Bitcoin yourself though (unless you choose to), which makes this the best solution for vendors who wish to offer bitcoin transactions without the associated risk of large market abandonment.

If you believe in Bitcoin, you could alternatively accept the payments yourself into a wallet held by you, this would be the best solution long term if the value of Bitcoin increases exponentially.

Obviously it all really depends on what you believe will happen and the risk you wish to take.

 

[GlennDrake]

But these are advantages for the retailer, not the customer, and are indicative of why (at least for the forseeable future) Bitcoin will only be a fringe player in eCommerce.

eCommerce (or, more correctly, successful eCommerce) is built on trust and confidence and that is why customers choose to use PayPal and Amazon etc. because they know that if there is a problem they will be on your (the buyers) side. What recourse does the buyer have if they use Bitcoin? None, and for this reason most people won't choose to use Bitcoin for eCommerce.

J

That's a good point, although people still use BACS transfers and cash transactions to pay for goods/services, these methods also provide the buyer with almost no means of recourse when things go bad.

All the chargeback arbitration and fraud mitigation associated with card payments has a cost and this is invariably passed onto the merchant. You'd never (at least not in the foreseeable future) offer Bitcoin (or other ******-currencies) as the sole payment method, so you could feasibly vary your price depending on which payment method the customer selects. Let the customer choose how much insurance they want to acquire.

There's a whole new breed of payment services that are providing alternatives to traditional card transactions, GoCardless is a good example, Bitcoin (via services like Bitpay) is just another. They each have their pros and cons, I don't think they're going to replace card transactions anytime soon but they all help to break the Visa Mastercard duopoly...that can't be bad!

 

[PuChCo]

We've integrated Bitcoin with our Kartris shopping cart software. Rather than take the easy option and just integrate with an online service, we have a native integration with the Bitcoin client itself.

I'm curious, how do you correlate bitcoin payments with purchases while accepting bitcoin directly without any middleman?

 

[Brandsumo]

I'm curious, how do you correlate bitcoin payments with purchases while accepting bitcoin directly without any middleman?

Through API most likely.

http://blockchain.info/api

 

[PuChCo]

Yeah I'm idiot, the link the guy posted explains it all anyway. Turns out you need a Windows server all to yourself to make it work. Not a good option for me.

I did however find a site called BTC Merch which simply automates payments through their system and sends them straight to your bitcoin wallet. Seems legit enough to me, might use it on my site when it's ready to open.

 

[businessprintinglondon]

ive never come across bit coin but I have heard a lot about it, i know the value has shot up, but do you think its going to be a good long term investement ?

 

[Brandsumo]

ive never come across bit coin but I have heard a lot about it, i know the value has shot up, but do you think its going to be a good long term investement ?

As with all investments, it's impossible to know how it will perform, short or long-term.

I'd suggest buying a small amount - an amount that you will not miss if it goes nowhere and loses value.

 

[businessprintinglondon]

Thanks Brandsumo, im tempted i read the story in the press about the guy who forgot he had them and had enough money to pay for a house.

 

[10032012]

I am a major fan of bitcoin and the concept of it.

However, I will never accept bitcoin payments. I don't see the point.

When we lose the pound and get the euro, I might change my mind, however, I am sure the EU will make it illegal to refuse euro as a form of currency anyhow.

 

[businessprintinglondon]

i can never see us having the euro in the UK, If anything I can see us leaving the EU, not to sure what effect that will have online business if im honest ?

 

[10032012]

i can never see us having the euro in the UK, If anything I can see us leaving the EU, not to sure what effect that will have online business if im honest ?

Well you would get more european players (germany, france, italy etc) targeting the UK market.

 

[businessprintinglondon]

very true

 

[GlennDrake]

Looks like HMRC are about to reclassify Bitcoins from a "redeemable voucher" to a "private currency", possibly by February. This will make Bitcoin more accessible in the UK by eliminating the VAT at the point of exchange. So essentially it will now be viable to host a full BTC exchange in the UK.

The article is on Forbes but unfortunately I can't post a link here yet (Maybe someone else can dig it out and post it here).

@Brandsumo also made a great point in respect to BitPay (bitpay.com). This payment processor allows merchants to accept Bitcoin without needing to worry about the volatility. BitPay will cash out the Bitcoin to GBP at the best rate following the completion of payment. There are a growing number of people in the UK now holding Bitcoin and looking for a way to spend them and support infrastructure growth.

 

[davehayes]

Just over year ago, a friend was doing his best to get me to invest in bit coins and I almost did, every time I read about it I could hit my head on the desk.
With regards to taking it as a form of payment via your website, I would worry that it ran the risk that a potential customers (a non bit coin user) may associate your site with something like silk road, and untrustworthy etc. In past few months the criminal side/use of bit coins as overshadowed the rise in value in the media.

I was in the same posistion as this a while ago. I have to say, like Karat bars a few years ago, I remain unconvinced about their longevity!

 

[GoAndPutTheKettleOn]

I cant see how any retailer could consider using Bitcoin as a payment method it's just so volatile.

Have a look on preev, a website which shows the current bitcoin exchange rate.

Just 2 days ago that was on £500 so it's gone up £26 (at time of this post) in just a couple of days. It can equally go down that much. Unless you can constantly update your "bitcoin" prices based on the exchange rate and then exchange the bitcoins for real money at the time of the transaction so you know what you're getting i wouldn't use them as a form of payment.

 

[GlennDrake]

@GoAndPutTheKettleOn you don't need to worry about the volatility if you use BitPay. They dynamically calculate the price using a spot rate at the point of sale. Once payment has been collected they can cash it out straight away in the currency of your choice so you're never actually holding any Bitcoins.

 

[successjr11]

Most people think bitcoin is just another form of currency when in actuality it is an industry. While bitcoin the currency has a 50/50 shot at survival, the delivery system is almost 100% certain to survive.

Do some research and you will see there are so many things that the bitcoins "network" will probably be able to do someday.

Like notary services, write your own will, buy or sell stocks without the middleman and so much more.

 

[ukcommerce]

@Brandsumo also made a great point in respect to BitPay (bitpay.com). This payment processor allows merchants to accept Bitcoin without needing to worry about the volatility. BitPay will cash out the Bitcoin to GBP at the best rate following the completion of payment. There are a growing number of people in the UK now holding Bitcoin and looking for a way to spend them and support infrastructure growth.[/quote]

This is one of the main reason I finally decided to sign up to this forum - whether to accept BitCoin/Litecoin payments on my site. I do not want the Bitcoin/Litecoin, I would rather have GBP or USD - and a payment processor like BitPay does offer that, and they accept the risk, not me. I still get paid.

I've also found GoCoin.com which is a payment processor based outside of the USA and is the only one to accept LiteCoin, along with BitCoin.

I would like to know if anyone else here has started accepting ******-currency payments and if there is any downside, it seems like a good opportunity to me -- provided I do not assume the risk and get paid (after processing) in currencies like GBP/USD.

 

[webgeek]

Bitcoin is volatile only so long as you hold without conversion.

Those who have this one sussed are the ones who immediately convert into local currency, whether via BTC-OTC or other channel.

If you plan on holding it more than a few hours, you're a speculator, like any other FOREX player. If you convert immediately, it's a form of payment, nothing more or less.

Those lucky enough to be expats are able to leverage international differences between regulations in handling, business formation and put together some lovely arbitrage scenarios.

Personally, we do not current accept BTC from any clients, because none have suggested it. As soon as one did, we'd jump on it with both feet. The easier it is for them to pay, the more likely they are to pay!

Food for thought.

 

[10032012]

Bit Coin is really clever. I said it once, I say it again. But...

Why would I accept Bit Coin over GBP?

This is the biggest issue for me, it doesn't solve a problem. If it was to become like a defacto global currency, then there is great reason to accept it. It kinds of shames the whole Euro currency concept - although not comparing it like for like as very much different.

But... If it did become like a "digital Euro" accepted globally, and I am solely based in the UK and the pound still exists as a currency, I still do not know why I would accept it. Maybe I just don't like change.

 

[Scott-Copywriter]

I'm a major advocate of Bitcoin. However, from a business perspective, I wouldn't offer it as a payment method at this stage.

Why? Because I only make changes like that if it's going to benefit my business by either increasing customer satisfaction or increasing sales. At the moment, Bitcoin is still in its infancy, so only a tiny handful of my clients will even know about Bitcoin, and out of those, I would say that virtually all of them would be equally happy to pay with normal money.

You have to ask whether there's even an opportunity in which a sale will hinge on whether you accept Bitcoins or not. Only at that stage is it worth looking into them further for your business. At this point, accepting Bitcoins is more ceremonial than anything else.

In short, I will accept Bitcoins for business when/if they take off, but we're not there yet.

 

[webgeek]

Why accept BTC over GBP?

Because, like Paypal, some people have net positive balances in that currency and are seeking places to spend it, giving preference to those vendors accepting the currency of choice.

If you're going to get preferential treatment because you accept BTC (not BTC over GBP, but rather BTC and GBP), then wouldn't you profit more by getting the sale in BTC than letting your competition get the sale in BTC?

It doesn't happen all the time, but is happening, particularly when a currency has painful cash-in / cash-out processes, such as limited numbers of facilities which provide no-fee or low-fee currency conversion.

Convenience = increased sales. It's just a matter of how much of a pain it is to be convenient

 

[10032012]

@webgeek how much more convenient is it to pay with bit coin over say handing over a crisp note, chip and pin or contactless cards?

 

[webgeek]

If you're in London and I'm in Glasgow, crisp notes being passed in a brown paper bag using the code phrase "moonlit serenade loves blue horseshoes" isn't very convenient.

If I've got BTC but not got a chip and pin card, such as foreign resident, expat, citizen of the world, those with banking woes, those with credit woes, etc, etc, then BTC is more convenient than getting a shiny new platinum American Express.

Believe it or not, there's a lot of people in this world who use Paypal, Ukash and other non-chip and pin currencies who have money to spend and appreciate vendors who accept multiple payment methods.

 

[QuickFile]

For those interested in accepting payment in bitcoin without the risk of actually holding the digital currency. We have setup an integration with Bitpay so that you can raise an invoice and receive payment in BTC. As soon as the funds are cleared it will be instantly converted to GBP using the best available rates. We've put together an FAQ on this here:

Accepting Bitcoin in Quick File FAQ

For those simply interested in developing their knowledge of bitcoin we've also produced a short(ish) primer with some useful links.

What is Bitcoin?

 

[Backrubber]

As with Quick File, I too accept Bitcoin as a payment method on my website (www.mybookkeepingmanager.com), although I very much doubt that anyone will (for a long time to come) choose this payment method over PayPal. The reason I'm doing this is to try to raise the awareness of Bitcoin as an alternative payment method to PayPal. If it turns out at some stage down the line that it is pointless doing this, I'll simply remove it as a payment option from my site.

 

[Merchant UK]

with one bitcoin worth just over £500 how do you price up products surely you can't charge 0.003 bitcoin for something can you??

 

[Backrubber]

The way it looks as though it works to me - and as I haven't received any payments in bitcoins yet, I can't be sure - is that when someone buys a product/service using their bitcoin wallet, they enter the price in pounds sterling for example, and the wallet does an automatic conversion into bitcoins. I've had a play around with my wallet and it looks as though this is what happens.

 

[GlennDrake]

@Merchant UK we don't show any pricing in bitcoin (BTC) mainly due to the volatility, plus very few can instantly grasp what x BTC is in GBP. All prices are displayed in GBP and when the customer reaches the checkout we do a conversion right there, actually Bitpay.com handle all that for us. It is possible to link into their API and deliver live pricing in BTC on all your products, but I don't really see much sense in this right now.

In other news, it seems we've moved on a bit since I started this thread...Scan.co.uk are now accepting payment in bitcoin...also buybitcoin.sg are have linked into the PayPoint infrastructure to allow bitcoin to be acquired in cash from 28,0000 UK newsagents...things move fast in the world of bitcoin!

 

[Backrubber]

From above:

..also buybitcoin.sg are have linked into the PayPoint infrastructure to allow bitcoin to be acquired in cash from 28,0000 UK newsagents...

Does this mean you can get physical bitcoins, or do you get the sterling equivalent?

 

[GlennDrake]

They give you the Sterling equivalent, basically you print off a slip on buybitcoin.sg, providing your wallet address, take it into your local newsagents, hand over the cash and the bitcoins appear on your wallet within 10 minutes.

I think it's Casascius that is (or perhaps was?) minting the physical bitcoins.