When Airbnb CEO Brian Chesky asked Twitter, “If Airbnb could launch anything in 2022, what would it be?” a few days ago, he probably wasn’t thinking about letting guests pay with crypto.
It’s what he got, however. On Jan. 6, after four days and 4,000 responses, he tweeted out a list of the top six suggestions, and “crypto payments” was No. 1.
The rest were more along the lines of what he probably expected: clearer pricing, a loyalty program, better customer service and the like.
“Already working on most, will look into the others now!” he said. Crypto, as it happens, was one of the suggestions he was already working on, as Airbnb gift cards can be purchased with cryptocurrencies.
That’s not as surprising as it sounds.
According to PYMNTS’ May 2021 “Cryptocurrency Payments Report,” 17.4% of existing crypto owners said they had used it to purchase something in the travel and leisure category. While that put it towards the bottom of 15 categories included — groceries, online gambling and streaming were on top — travel and leisure was the leader when those crypto owners were asked what they would think about purchasing with crypto in the future.
It was selected by 62.6% of the respondents — the only category to break out of the 50s.
For one thing, that’s a lot of people. According to PYMNTS research, about 12% of consumers — about 30 million — currently own one or more cryptocurrencies. That squares pretty well with other research in this field, notably Pew Research. Another 4.5% — 11.5 million — have owned crypto in the past.
More importantly, another 17% of non-owners — 42.5 million — said they “may acquire cryptocurrency for making purchases in the near future.”
Which raises a number of questions. Most notably, where are all these people spending that crypto?
While there are still relatively few firms that directly accept cryptocurrency payments, AirBNB is hardly the only one sticking a toe in the crypto payment waters by partnering with a payments processor. Chesky should probably take note of Travala (which has its own cryptocurrency, AVA) and CheapAir.com.
However, most of them accept crypto indirectly through a specialized payments processor like BitPay (which co-sponsored PYMNTS’ “Cryptocurrency Payments Report”). Other BitPay gift card customers range from Amazon to Zappos.com, while it powers direct online payments for companies like Microsoft, Twitch, and computer seller Newegg
Other firms in this field include Flexa, which works with Whole Foods and Home Depot, and payments firm InComm Payments.
Then there’s BakktApp, which handles crypto trading and loyalty points, crypto payments for Starbucks and Quiznos, and last year announced a big partnership with Mastercard.
And, of course, there’s PayPal and its 30-million-plus merchant network.
See more: PayPal’s Scale Drives Crypto’s Utility
Follow the Customer
Why are they jumping into crypto? Because customers want it. Two-thirds of cryptocurrency owners say not enough merchants accept crypto, PYMNTS found, and more than half say they are more likely to buy from merchants that accept crypto. And 18% of the population — 46 million people —say they are interested in paying with cryptocurrencies.
A 2021 article by Deloitte titled, “The Rise of Using Cryptocurrency in Business” said that “crypto may provide access to new demographic groups,” adding that “up to 40% of customers who pay with crypto are new customers of the company, and their purchase amounts are twice those of credit card users.”
Still, incorporating crypto payments is a challenge requiring education to make merchants comfortable with it and integrate it into point-of-sale systems, according to Debbie Guerra, ACI Worldwide’s executive vice president, merchant solutions.
“Merchants are accustomed to adapting their payment methods and models in order to accept different types of payments,” she told PYMNTS recently, adding “ultimately, the merchant also has to make decisions about how they’re going to receive those funds, if they’re looking for them to be converted into local currencies or fiat currencies, or if they’re actually going to be accepting and holding crypto.”
Pros and Cons
The latter is a lot more difficult, although there are benefits, the U.S. Chamber of Commerce noted in a September post for business owners considering accepting cryptocurrency.
Pros included lower fees, payment security and irreversible transactions that mean no charge-backs.
On the con side, there’s crypto’s extreme price volatility and the tax implications, as the IRS considers crypto to be “property” for tax purposes — meaning you have to keep track of the price when it was received and the price at which it was sold, and report it as a capital gain or loss.
There’s one other big downside to paying with crypto, and it’s the potential buyer’s remorse. Just ask Laszlo Hanyecz, who, on May 22, 2010, made the first known payment with Bitcoin.
On that date — memorialized as Bitcoin Pizza Day in the crypto community — Hanyecz bought two pizzas. For 10,000 bitcoins. At the current price of $43,250, that’s $432.5 million, or $27 million per slice.