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Merits and Demerits of Bitcoin for Ecommerce

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Bitcoin screen

Like Bitcoin, eCommerce has experienced stellar performance since its inception, constantly attracting new businesses and individuals worldwide. Statistics show global eCommerce sales will reach $7.3 trillion by 2025. However, the landscape mainly changes as a result of new technologies and shifting consumer preferences. Nevertheless, the shifts in e-commerce primarily target added convenience for merchants and consumers. 

Bitcoin is a decentralized digital currency, facilitating instantaneous, secure and cheaper money transfers online. That has significantly changed how merchants transact amongst themselves and with consumers worldwide. The following article discusses the main benefits of drawbacks of Bitcoin for eCommerce. 

Bitcoin’s Benefits for Ecommerce 

More Options During Checkout 

Most online merchants have limited customers to using credit cards, debit cards and money processors only to pay for goods and services. However, such options are not easily accessible to a majority of consumers. That hinders merchants from doing business with consumers from unbanked populations. Bitcoin offers an alternative payment method, accessible to anyone with a smartphone and internet connection. Thus, it opens merchants to a new and emerging market comprising customers who actively use crypto and are looking for Bitcoin-friendly businesses. Integrating Bitcoin as a payment method ensures greater convenience for merchants and consumers. 

No Chargebacks 

Unlike credit card payments or bank transfers that service providers can reverse, Bitcoin transactions are irreversible. Bitcoin is a P2P network that verifies and validates transactions on a shared digital ledger. Validated transactions are permanent and impossible to alter, eliminating any chance of chargeback fraud. However, trading online platforms like Immediate Edge can willingly refund money wrongfully sent to their wallet.  

No Regulatory Restrictions 

Perhaps the most significant advantage of Bitcoin for merchants is that it is not subject to regulatory requirements such as PCI compliance. Any merchant can add Bitcoin to their payment systems and process funds from customers without any external intervention. Bitcoin’s decentralization also ensures unlimited transactions, allowing merchants and consumers to acquire the products, services and funds that they need at their convenience. 

Lesser Risks 

Fraud is among the most severe threats to online transactions. Bitcoin is also subject to such threats but has lesser risks than credit cards, debit cards or banks. Its underlying blockchain technology generates an accurate, up-to-date, and irreversible public ledger, ensuring greater transparency and security in all transactions. Bitcoin allows users also to transact anonymously, significantly limiting data breaches. That cushions merchants and consumers from several common cyber threats. 

The Drawbacks of Bitcoin for Ecommerce 

High Volatility 

Like other cryptocurrencies, Bitcoin is a highly volatile currency with constant upward and downward price fluctuations. The main issue with Bitcoin’s volatility is that it makes it challenging for merchants to set prices since they must adjust based on the price movements. The constant Bitcoin price fluctuations make it harder for merchants to determine the specific amounts of Bitcoin worth their products and services. However, volatility could also be an advantage to crypto businesses, enabling them to generate huge returns when Bitcoin prices increase. 

Password Theft or Loss 

Bitcoin wallets have private keys for authenticating transactions unique to every user. Those keys act as the passwords for bank accounts, meaning anyone who gets them can transact through your wallet. Thus, losing your private keys could mean losing all the funds in your Bitcoin wallet. That makes some merchants and individuals hesitant to adopt crypto since there is no way to retrieve the funds without the private keys. 

While merchants and consumers remain divided on Bitcoin, its adoption is steadily growing across several eCommerce platforms. As discussed above, Bitcoin has some setbacks, but it offers numerous benefits to merchants and consumers. Bitcoin facilitates reliable, safer, and low-cost payment processing with fewer risks than conventional payment systems.