Jun 27, 2014
Whilst there are many different businesses in the UK accepting Bitcoin, it still remains difficult for them to do so and exchange their earned Bitcoins into pounds sterling. This is the main barrier I encounter when trying to persuade a local business to accept Bitcoin.
When I raise this concern with fellow Bitcoin enthusiasts I’m usually met with the same three responses:
For many businesses, especially smaller ones (incidentally the ones that could benefit the most from accepting Bitcoin), this isn’t a viable option. Cash flow is often very tight. Businesses need to pay their suppliers, and chances are their suppliers don’t accept Bitcoin.
Also, volatility could prove to be an issue if a business decided to hold Bitcoin.
BitPay are a fantastic company, providing an excellent service to thousands of businesses around the world.
In case you aren’t aware, BitPay are a payment gateway allowing businesses to exchange the Bitcoins they receive from customers into their local currency with daily settlements. They provide hosted checkout screens, an API and a simple point-of-sale app, allowing businesses to accept Bitcoin easily both on their website and in their brick-and-mortar locations.
That sounds great! So why can’t UK businesses just use this?
At the time of writing, BitPay’s minimum settlement to UK bank accounts is 1,000 GBP. Most businesses will not receive this much revenue in Bitcoin within a short period of time, which effectively ties their money up in BitPay and makes this an unattractive option.
I asked BitPay on Twitter if they had any plans to reduce the minimum settlement amount and they responded:
@lewisajackson We are trying to work on this, we will make an announcement when and if a change is made— BitPay (@BitPay) April 8, 2014
If they do manage to reduce the minimum settlement amount I think it will be a turning point for Bitcoin in the UK. I’ll certainly feel more confident approaching businesses to persuade them to accept Bitcoin when I can recommend a great service like BitPay.
If I owned a business this is what I would do. Unfortunately for the less Bitcoin-savvy this can’t be expected.
More importantly, SEPA and trade fees when using an exchange such as Bitstamp or Kraken (in my opinion the best exchanges available to UK citizens at the moment) could prove uneconomical for small trades.
It’s very easy for any business to start accepting Bitcoin, all they really need is a wallet and they’re good to go! The real issue lies when they want to convert that Bitcoin into their local currency, which is often needed to pay suppliers and other outgoings. Companies like BitPay seem to provide a great service to American businesses, but their minimum settlement amount to UK bank accounts make it an inviable option for businesses based in the UK.
To solve this problem we need a more attractive merchant solution that can provide daily pound sterling settlements to UK bank accounts.
When will we get this? Who knows, but when it happens it has the potential to drastically change the landscape of Bitcoin in the UK.
Do you own a business in the UK that accepts Bitcoin? Do you know of any merchant solutions available to UK businesses that I haven’t mentioned? If so, or you have any comments at all, please do get in touch on Twitter, Reddit, by email or by using the links below.