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59% of Merchants Accept Bitcoin to Boost Ecosystem

From Californian wineries to bars in Beijing, 2013 was widely considered a banner year for bitcoin, as business owners around the world began to take advantage of the technology to cut costs and woo new and influential consumers.

Unsurprisingly, expectations were high for 2014, and so far, it’s delivered with major brands such as Lord & Taylor, Overstock and TigerDirect following the lead of early adopters to accept bitcoin for payment.

Still, while merchant adoption of bitcoin and other digital currencies is on the rise, less is known about these new additions to the digital currency ecosystem as a demographic – why they accept bitcoin, how they do so and whether they consider their experience with bitcoin to be positive.

In Part One of this series, we’ll seek to better define the merchants who are operating in the space to paint a picture of this influential sector of the expanding ecosystem.

51% began accepting bitcoin in the last three months

In total, 51.8% of respondents reported that they began accepting bitcoin within the last three months. Nearly one-fifth (17.8%) reported adding bitcoin as a payment option within 30 days prior to the survey.

Still, there were a sizeable number of merchants who have long supported bitcoin. Roughly one-third (29.2%) of respondents have been accepting bitcoin for six months or more, with 12.5% reporting that they’ve been accepting the currency for over one year.

When Did You Start Accepting Bitcoin?

Despite fears that the recent decline in the price of bitcoin would turn merchants away from the volatile ecosystem, the survey suggests that its negative attention may have actually bolstered interest in bitcoin.

71% accept bitcoin online; 88% own bitcoin

The survey found that of the merchants who accept digital currency, 71% of respondents do so online, while 34% of respondents accept bitcoin at their bricks-and-mortar stores. Some merchants surveyed accept bitcoin both online and at their physical stores.

While it may not be surprising that the digital payment method has been most widely used online, the margin is notable, as it suggests that merchants are twice as likely to accept online than at a physical location.

Furthermore, the vast majority of merchants who accept bitcoin also reported that they own or owned bitcoin, with 88% saying that they have done so.

Just 12% of merchants who accept bitcoin said they have never owned bitcoin.

59% accept bitcoin to boost the ecosystem

Perhaps most surprising, was that despite the many benefits bitcoin can bring to businesses in terms of savings, only 8.2% began accepting bitcoin to save money, and just 8.2% were encouraged to do so by their customers.

The majority of merchants (59%) say they began accepting bitcoin to show their support for digital currency.

What Was the Main Reason You Started Accepting Bitcoin?

Still, the results lend credence to those who have accused some companies of trying to take advantage of bitcoin’s popularity. Nearly one-fourth (24.2%) said that the main reason they began accepting bitcoin was that it was a marketing opportunity.

ClearGate & CIEO
Bitcoin Merchant Services

Survey Results: One-Fourth of Bitcoin Merchants Enjoy 10% Sales Boost

In the first installment of our merchant survey, we uncovered that the majority – 59% – of merchants are accepting bitcoin to better support the bitcoin ecosystem. However, the bigger takeaway from this statistic is that the main driver of bitcoin adoption is not its cost-cutting benefits when compared to traditional financial tools.

While bitcoin benefits from adding like-minded merchants to the ecosystem, the true expansion of bitcoin as a currency and payment method will likely rest on convincing those who may not believe fully in bitcoin’s underlying political motivations and ideology.

As such, it’s arguable that the most important question when it comes to merchant expansion is, if the savings bitcoin provides isn’t a major factor: Do merchants that accept bitcoin see a sales increase for doing so? And if so, do they make enough to convince those who might have reservations about joining the movement?

To date, we know that major retailers are achieving this result. Online retail giant Overstock topped $1m in sales in just under two months of accepting bitcoin, and TigerDirect followed suit, passing this milestone in a similar timeframe.

What isn’t clear, though, is if smaller and mid-size merchants are achieving similar results.

25% attribute more than 10% of their monthly sales to bitcoin

In total, our survey found that 24.5% – or roughly one-fourth – of respondents indicated that more than 10% of monthly sales are attributable to bitcoin purchases.

It’s important to note that an unknown number of these respondents are likely bitcoin-only businesses, but that we do know that some merchants are achieving similar results even when accepting fiat currency.

The majority of merchants (56%), however, say that bitcoin is attributable to 0% to 2% of their total monthly sales. Though, it should be noted that Part One of our survey showed half of respondents have only been accepting bitcoin for under three months, meaning this figure may be due to the initial bump in sales most merchants report.

44% say it’s ‘very easy’ to accept bitcoin

The survey also asked merchants to rate how difficult it was to start accepting bitcoin, and in the process debunked a long-standing myth that accepting bitcoin is an onerous process.

Overall, 42.7% said it was ‘very easy’ to begin accepting bitcoin, while an additional 35.39% said it was ‘easy’. Just 1.12% reported that it was ‘difficult’ to begin accepting the digital currency.

On a scale of one to 10, with 10 representing the highest difficulty, respondents, on average, reported that accepting bitcoin had a difficulty level of 2.

ClearGate & CIEO

Bitcoin Merchant Services