Why Amazon Should Accept Bitcoins: It's All About the Margins and Protection Against Credit Card Fraud
Accepting bitcoins as a payment option would be a long-term saving scheme for Amazon. It is an innovative approach that can potentially change the way people buy things forever.
Apart from the obvious boosting margins, taking bitcoin payment would be beneficial for a company like Amazon as protection against credit card fraud. In an article by Venture Capitalist Marc Andreessen, he was able to prove why Amazon should take bitcoins as one of their payment options. He said that ďIf a person sells electronics online, profit margins in those businesses are usually under 5 percent, which means conventional 2.5 percent payment fees consume half the margin. That's money that could be reinvested in the business, passed back to consumers or taxed by the government. Of all of those choices, handing 2.5 percent to banks to move bits around the Internet is the worst possible choice. Another challenge merchants have with payments is accepting international payments. If there are certain products or services that arenít available in certain countries, the answer is often payments."
With a lean 2% operating margins in the 1st quarter of 2014, accepting bitcoins would be beneficial for Amazon as they would be able to cut-out on middlemen like Mastercard, Visa, and Discover Financial Services. An effortless growth can be seen just with accepting bitcoins as a form of payment. Bitcoins have immense properties for buyer transactions. Having low fees would mean Amazon can pass the savings on to its customers while getting a price advantage over its competitors. Another advantage of trading bitcoins is it brings about no risk of fraud or chargebacks. Any confirmed transaction is protected by the full hashing power of the network. Accepting bitcoins from any country in the world would work to its full advantage.
Currently, a number of merchant sites on the internet are accepting bitcoin as a payment option. Not to mention Overstock.com, which is a competitor of Amazon. To name, we have Wordpress.com, The Pirate Bay, Reddit, The Internet Archive, OkCupid, 4chan.org, Namecheap, EZTV, Mega.co.nz, and Lumfile.
Many crypto experts are grazing their heads and trying to make sense of the current cons given the innovation and exhiliration that the global bitcoin community shows. Why is there so much demand on the currency? Why is bitcoin currency exploding right now? There is certainly a whole lot of demands and a lot of attention on the currency. Obviously, success breeds some level of success in capital markets. According to Bitcoin.org, since bitcoin was born, every aspect of its network has been in a continuous process of maturation, optimization, and specialization. And projections show that bitcoins will prosper for some years to come. The core Bitcoin network can scale to much higher transaction rates than are seen today, assuming that nodes in the network are primarily running on high end servers rather than desktops.
With bitcoin as the future of digital currency, it will eventually continue to change ecommerce payments.
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