Bitcoin shows staying power as online merchants chase digital sparkle 

Bitcoin is catching on at U.S. online merchants including Overstock.com and Expedia, as customers use a digital currency that just a few years ago was virtually unknown but is now showing some staying power.

“Bitcoin isn’t going anywhere; it’s here to stay,” said Michael Gulmann, vice president of global products at Expedia Inc. in Seattle, the largest online travel agent. “We want to be there from the beginning.” Expedia started accepting bitcoin payments for hotel bookings on July 11.

Until recently a niche alternative currency touted by a fervent group of followers, bitcoin has evolved into a software-based payment online system. Bitcoins are stored in a wallet with a unique identification number and companies like Coinbase and Blockchain can hold the currency for the user.

When buying an item from a merchant’s website, a customer simply clicks on the bitcoin option and a pop-in window appears where he can type in his wallet ID number.

There are also worries about bitcoin’s volatility: its price in U.S. dollars changes every day. On Wednesday, bitcoin was up 0.4 percent at $514.09.

“We don’t have to deal with the actual holding of the bitcoin: it’s the payment processor that takes the currency risk for us,” said Bernie Han, chief operating officer at Dish Network Corp, in Englewood, Colorado. “That’s what makes it appealing for us and I guess for other merchants as well.”

The only risk for the retailer is if the counterparty, or payment processor, doesn’t fulfill its obligation.

For some, it has become a beneficial situation for retailers, as they take advantage of lower transaction fees and sales from new customers.

In a way, bitcoin has been used by retailers as a marketing strategy to bring some much-needed buzz to brands that may be struggling.

 

 

Source: Reuters

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