And they say there is no real-world use cases for crypto...
According to Overstock.com, that's just not true.
Overstock.com is an online retailer that has been integrating cryptocurrency payment options for years now.
It was one of the first to accept bitcoin as a form of payment and has since added several other crypto options.
The CEO is a bit of a tech nerd and most saw the integration of crypto as more of a hobby by the idealist CEO as opposed to a sound business decision.
However, according to their latest quarterly filings, that is not entirely the case...
Crypto is better than credit cards for merchants?
According to Jonathan Johnson, one of the BOD (board of director) members, cryptocurrency payments are a much better payment method that credit cards for merchants.
Hmm, but how can that be, most in traditional finance would have you believe that crypto is neither cheaper or better for businesses than the status quo?!
According to Johnson, the credit card infrastructure is much more expensive for merchants than the crypto infrastructure.
For example, Overstock said they have over 40 employees in their credit card fraud department alone. Their main task is to oversee credit card payments and resolve any potential issues that may come up.
Crypto on the other hand has been much easier and cheaper according to Johnson.
The API of major cryptocurrency exchanges and brokerages like Coinbase enable merchants to accept cryptocurrency payments without establishing secure and expensive infrastructure.
From Johnson:
“We pay a processing fee for credit cards, and we employ about 40 people in our fraud department. That’s a cost of doing business with credit cards. When we take cryptocurrency, we have a very small transaction fee with Coinbase, much smaller than our credit card processing fee, and we have no fraud prevention department. It’s like a cash transaction. For us, that is a much cheaper way of doing business."
(Source: https://www.ccn.com/overstock-sees-120000-week-in-cryptocurrency-revenue-as-stock-surges-11/)
That sounds great and all, but does Overstock do much business in crypto?
I'm glad you asked!
Yes, yes they do!
According to Johnson, they average right around $120k worth of crypto transactions PER WEEK.
That is a signficant amount.
Overstock is likely to pave the way for other online retailers to start accepting crypto as they see it as a major cost saving tool.
I'm looking at you Amazon.
There you have it, the next time someone says there are no real world use cases for crypto as a form of payment, point em to Overstock, and probably very soon Amazon and whole host of others as well.
Stay informed my friends.
Image Source:
https://www.engadget.com/2014/01/09/overstock-accepts-bitcoin/
https://www.ccn.com/overstock-sees-120000-week-in-cryptocurrency-revenue-as-stock-surges-11/
Follow me: @jrcornel
This is so cool and Overstock is ahead of the game!
Nice! 👍
Yes, Bitcoin is like liquid money. All of the online market place should accept bincoin.
I think they will, eventually.
Finally my chance to sell all my properties to invest in crypto :]. JK I have no such thing. But for real, could overstock get banned like they did with SilkRoad?
No chance. They are a market place selling legal goods.
Thats good enough for me, thanks for the heads up!
Not unless they are selling illegal drugs and assassins.
Bingo.
I thought Overstock's crypto retail transactions are converted directing into fiat. Did that change recently? I'm also aware that percentage of the company's assets held in crypto was far less than the percentage of the value transacted with crypto.
@jrcornel how should I make sense of this as it relates to doing business in crypto?
Whether they convert them to fiat immediately or not is irrelevant. The point is that it lets people transact in crypto if they should so choose. Not only that, but this shows other merchants that it is much cheaper than using credit cards, which should help spur adoption. Things that further legitimize crypto.
How significant do you think the savings are from transacting in crypto when you add conversion fees, as compared to going through traditional merchant processors with fiat?
I don't have any specific numbers except when you add in the fraud department that traditional credit cards require, I would say... at least a tremendous amount.
Now if Overstock didn't automatically convert purchases in crypto to fiat when settling the transaction, those savings would be much larger. Why do they not? Tax reasons?
Perhaps, but they cant buy everything in crypto just yet, and yes also taxes likely are a significant reason.
The CEO mentioned in a talk that they convert half to FIAT and sit on half until it's a good time to sell, for millions in gains.
Good.
I hope to see this in future
Valuable information sir. thanks for sharing this news.
I appreciate your content.
Upvote resteemit done
Haha I love it. Starting to see crypto everywhere now.
This is a great news.
very helpful information
thanks for updating us about that
have a nice day