Bitcoin Merchant Adoption Might Just Be Accelerating In Asia
Bitcoin isn’t for payments?
While that may be the popular narrative of late, don’t tell that to Bellatorra Skin Care, a luxury brand that has found the opposite as it’s expanded internationally into markets such as China and India.
Not only is bitcoin (which has seen years of declining interest from merchants as the network bumped up against its limits) a sought-after choice for business-to-business (B2B) payments, but for retail payments, other cryptocurrencies are finding a foothold as well.
“We expanded our business internationally this past year, and have had strong demand [for cryptocurrency] from customers in markets such as China and India, where fiat cross-border transactions have inefficiencies,” said Nathan Halsey, the CEO of Bellatorra, based in Beverly Hills, California.
Halsey told CoinDesk:
“We have found cryptocurrency to be a viable solution for resolving these challenges, and we see other companies with international business adopting the same practices.”
Indeed, one of the early use cases highlighting bitcoin’s innovation was cross-border payments where there were bottlenecks and high fees for transacting.
Bellatorra ran into these hurdles in Asian markets and says its wholesale customers began asking for the option of paying in bitcoin. So in July 2017, the company began a relationship with bitcoin merchant services provider BitPay.
“We have completed multiple six-figure transactions, without an issue, and have settled funds from the time of customer payment to settling in U.S. dollars in our U.S. bank accounts in less than one business day,” Halsey continued.
And according to BitPay CEO Stephen Pair, Bellatorra’s experience in circumventing cumbersome traditional payments rails with crypto isn’t uncommon. Cosmetic companies such as Nuciya Beauty in Canada have found that people tend to spend more per purchase when they use cryptocurrency.
As such, Bellatorra is looking into adopting other cryptocurrencies, and making them a bigger segment of their business, in the future.
“We are definitely pro-cryptocurrency as a payment option,” Halsey said, adding that the company has started holding onto small amounts of the cryptocurrencies it accepts instead of immediately cashing out.
Diversifying retail payments
For its retail customers, Bellatorra has already begun accepting litecoin and ether, ethereum’s native cryptocurrency.
Since BitPay doesn’t facilitate merchant payments in anything other than bitcoin and bitcoin cash, Bellatorra had to establish relationships with other processors to enable these cryptocurrency payments.
According to Halsey, using PayWithEther.com and GoUrl.io, Bellatorra garnered dozens of litecoin and ether payments from predominantly Asian customers spending roughly $300 to $1,000 per order.
While bitcoin’s transaction fees have come down significantly over the past several months, the thought of high fees has caused some merchants to hedge, according to Jimmy Song, a well-respected developer and partner at Blockchain Capital.
Yet it’s not only a hedge but also a way to solicit more sales, Song said.
Cryptocurrency trading has seen huge amounts of adoption in Asian markets recently, with many industry observers asserting that if cryptocurrency businesses aren’t targeting these markets, they’ll be left behind.
And according to Bellatorra’s Halsey, there’s no reason for a merchant business to not turn on the option since it’s so easy.
“I can tell other companies looking at the space that if you are used to taking a credit card for payment, this is every bit as simple if not simpler,” he said.
An Asian persuasion
Yet, the rapid growth of B2B bitcoin payments still dwarfs altcoin use cases for retail payments.
To get an idea of the size of the market, international B2B payments now account for roughly 15 percent of BitPay’s business. And that’s after a 328 percent increase in the payments dollar volume BitPay took in between 2016 and 2017.
Sonny Singh, chief commercial officer at BitPay, told CoinDesk he expects those payments to increase another fourfold in 2018.
These numbers are likely one of the reasons BitPay secured $40 million in a Series B round recently. And the main focus for that money will be expanding its services into Asia, said Pair.
For one thing, a BitPay investor based in China would like to see the company open an office in the country, Pair said.
To make that happen, the company would like to start building relationships with banking partners in China, to offer the ability for merchant clients to cash out into their preferred currency and account, he continued.
Speaking to that focus, Pair said:
“The staff there will be focused on customer service, sales, engineering services, compliance, things you really need a local presence for.”
Beauty products image via Shutterstock