Bitcoin

Retail Bitcoin Acceptance Drops … Even More

Using bitcoin isn’t exactly the frictionless ‘Uber Experience,’ most consumers are after. The cryptocurrency bitcoin has its fans, its detractors, and its users and non-users and declining users.

Count retailers among that last group.

As Bloomberg News reports, retailers were on the fence about the digital currency being used as legal tender. And now that bitcoin’s price has spiked, retailers are in fact backing away from its use.

The newswire said that bitcoin acceptance occurs at just three of the top 500 online merchants that are followed by Internet Retailer. That’s not a lot. But it’s even less than had been seen last year when the tally was five.

A research note put out by Morgan Stanley analyst James Faucette highlighted the discrepancy between the fact that bitcoin is barely accepted among merchants and the upward leaps in bitcoin’s price.

The “bitcoin owners are reluctant to use the cryptocurrency given its rate of appreciation, more evidence that bitcoin is more asset than currency,” Faucette said, as Bloomberg noted.

The top merchants, of course, include Amazon and Walmart, and yet Morgan Stanley did not disclose which of the retailers use bitcoin. Overstock is one of them, said Bloomberg, and that retail firm has said in the past that it logs sales of as much as $5 million annually from the cryptocurrency.

It is “way easier to trade speculatively than convince new merchants to accept the cryptocurrency.” For bitcoin acceptance, as with any other cryptocurrency (such as Ethereum), scale becomes important, transaction growth matters too. Recent news has also spotlighted the lack of legitimate transactions using bitcoin (and the fact that it was also prominent as a ransom in several ransomware attacks).

As has been noted, transaction fees are also on the rise, which makes it tough to buy smaller retail items.

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Call it the great tug-of-war. Fraudsters are teaming up to form elaborate rings that work in sync to launch account takeovers. Chris Tremont, EVP at Radius Bank, tells PYMNTS that financial institutions (FIs) can beat such highly organized fraudsters at their own game. In the July 2020 Preventing Financial Crimes Playbook, Tremont lays out how.

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