In a recent interview, PayPal president David Marcus offered one reason his company is hesitant in embracing digital currency. Not enough merchants are accepting cryptocurrency as payment to make it really viable or competitive, he said—and it's certainly a comment we've heard echoed by people both inside and outside the digital currency industry. Though it's often repeated, we here at Coin Pursuit are finding it to be less true than it was even a year ago—and that trend is continuing. There are thousands of merchants already accepting alternative currency as payment—heck, you can even book a flight into space with it!—and more vendors are signing on every day.
In this article, we're gonna take a look at what could change the minds of some of those “not-enough-merchants” naysayers out there. A very big name in online merchandising is about to climb aboard.
Overstock.com is a discount warehouse that has rocketed to the top of the online retailing industry since they were founded by CEO Patrick M. Byrne in 1999. Headquartered near Salt Lake City, Utah, Overstock.com offers low overhead and discount prices on just about anything you could imagine, from clothing and furniture to electronics and cars. Their web page boasts close to a million different items, and their revenue in 2012 was well over one billion dollars. They're very big and very popular—and they've recently decided to add digital currency to their accepted modes of payment.
Byrne was recently interviewed by Fortune Magazine, and he opened by saying he was a fan of Bitcoin (currently the only digital currency Overstock is planning to accept), but that he didn't own any himself. That aside, he added that from a business standpoint, adopting Bitcoin is healthy for his company's interests:
It's no secret that our net margin is about 2% now. And so the savings would be a very substantial improvement to our bottom line.
He continued by endorsing the concept of cryptocurrency, which is in line with his own personal philosophy as a student of the Austrian School of Economics:
If you believe in limited government, you want to have a monetary system that is based on something where no government mandarin can just create money with a stroke of a pen...We're not going to get rid of the Federal Reserve any time soon, so Bitcoin is a step in the right direction.
If that sounds like a ringing endorsement, we'd like to point out here that Overstock didn't get where they did without making sound financial decisions. As such, they aren't hedging their bets or leaving themselves vulnerable. Overstock's immediate plans include partnering up with Bitcoin payment processors in order to more easily accept cryptocurrency payments, according to a recent article from Forbes Magazine. Since the up-and-down volatility of the young Bitcoin market makes some merchants nervous, Overstock plans—at least for the immediate future—to immediately exchange any Bitcoins they receive into more stable US dollars. In other words, Overstock will take your Bitcoins—but they aren't planning to hold on to them for any period of time. At least not right away.
Overstock's decision to accept Bitcoins was announced in December of 2013, and they're still hammering out the details with payment processors and other digital currency industry analysts. As things stand now, they expect to start processing cryptocurrency payments for goods purchased in their online store sometime during the second half of 2014.
This could very well prove to be big news—not just for Bitcoin investors, but for vendors who have been watching from the wings with a wait-and-see attitude. You can bet they'll be watching closely as Overstock.com takes the plunge; if all goes well for one of the largest online retailers in the world, more merchants will undoubtedly follow suit. As Byrne put it in his interview with Fortune, “Adoption of itcoin is low, but I think once we and some other major guys start accepting it that could change very quickly.” It could be the first domino in a large and profitable chain reaction.
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