Making payments with Bitcoins

[Lamtel]

Let's say that most wholesalers and retailers started receiving payment for goods bought with Bitcoin. What do you think can happen to the seller when the price of Bitcoin eventually drops and he or she is about to go to market to purchase more goods into his warehouse or stores. Should the buyer that made payment with Bitcoin pay an extra charges in a situation where the Bitcoin market is not looking favourable so that the seller will not run into lost.

[fullfitlarry]

Let's say that most wholesalers and retailers started receiving payment for goods bought with Bitcoin. What do you think can happen to the seller when the price of Bitcoin eventually drops and he or she is about to go to market to purchase more goods into his warehouse or stores. Should the buyer that made payment with Bitcoin pay an extra charges in a situation where the Bitcoin market is not looking favourable so that the seller will not run into lost.

That is the very reason why there's not much store that accept Bitcoin right now, it's because of it's volatility.

Your scenario is one of them, so if someone bought from their store when the price is $90k, then suddenly, it drops to $89k without them selling it, then obviously they've lost already. So that is one dilemma that even if there are some online or offline stores that accepts Bitcoin, majority doesn't want to accept it because of this.

I don't think the buyer should be charge with extra, prices of items are based on the current price and not after you bought it or when the price of Bitcoin declines.

[Darker45]

No, it's not the customer's responsibility to cover for the loss. The agreed price when the transaction took place is the final price.

As for the business, it's either the operator liquidate the coins right away or risk keeping it for a while to make additional profit. It's for him/her to decide. Whatever happens, it's his/her full responsibility, not the customers'.

I think this is the main hindrance to merchants adopting Bitcoin payments. If they do, they have to use payment processors that immediately convert Bitcoin sales to fiat, which is in a way pointless.

[rat03gopoh]

Should the buyer that made payment with Bitcoin pay an extra charges in a situation where the Bitcoin market is not looking favourable so that the seller will not run into lost.

What if the price increases, do merchants have to return some of the increased value?
When merchants decide to implement bitcoin payments, one of the main things they will tolerate is volatility. They no longer have to worry about who will bear the cost of the value reduction. After all, as mentioned above, there are many strategies to protect value.

[bitbollo]

this is a well known problem from the "origin" of the first trades. But this can potentially become less and less a problem in the future...for many reason.
first of all price can go down...but even up. this should be always taken into account. personally I want to "collect" btc and not fiat cash...
moreover, with bitcoin you're also acquiring some "insurance"? advantages? that fiat doesn't offer. the standard advantage offered by bitcoin.
of course... if you have to pay your furniture in fiat you had to exchange your coins... one of the easiest solution could be just to EXCHANGE immediately = you don't lose in a trade. like all "treasuries company" you can just save your excess in bitcoin and not in FIAT (taking in account your planned expense and any emergency fund).

[MusaMohamed]

this is a well known problem from the "origin" of the first trades. But this can potentially become less and less a problem in the future...for many reason.
first of all price can go down...but even up. this should be always taken into account. personally I want to "collect" btc and not fiat cash...
moreover, with bitcoin you're also acquiring some "insurance"? advantages? that fiat doesn't offer. the standard advantage offered by bitcoin.
of course... if you have to pay your furniture in fiat you had to exchange your coins... one of the easiest solution could be just to EXCHANGE immediately = you don't lose in a trade. like all "treasuries company" you can just save your excess in bitcoin and not in FIAT (taking in account your planned expense and any emergency fund).

Depends on your view and plan for your finance, you can consider bitcoin as an investment asset or a mean of payment. It's easily to use your bitcoin for spendings, payments for anything if you simply and only consider Bitcoin as your mean of payment. Perhaps for privacy as if it is simply payment need, you can use cash, fiat currency, bank transfer easily already.

If you consider Bitcoin as your investment asset, you will not want to spend it or will try to minimize your payments with bitcoin. You know that if Bitcoin will incrase in price with time and if you used your bitcoin for payments, you firstly lose it and secondly you might have to buy bitcoins at higher and more expensive price.

[Luzin]

Should the buyer that made payment with Bitcoin pay an extra charges in a situation where the Bitcoin market is not looking favourable so that the seller will not run into lost.

It means that this is based on the agreement of the market price conditions at that time. So the buyer and seller are people who understand price volatility. They know it can go up and down, so they understand that they might lose or later gain. If it is done like you suggested, then it will never end. When prices go up or down, buyers and sellers will continuously interact, and it will never stop. But I think many traders would prefer to use Fiat for transactions because it is recognized worldwide and its value is certainly not as volatile as Bitcoin. Although inflation actually continues to reduce the value of money, many people are not aware of that.

[Oshosondy]

Should the buyer that made payment with Bitcoin pay an extra charges in a situation where the Bitcoin market is not looking favourable so that the seller will not run into lost.

No, just simple no. No one will want to pay the seller extra money because the price of bitcoin is decreasing, the buyer will just pay the approximate amount of money in bitcoin and nothing more than that. The seller will have to bear the loss if the price of bitcoin decrease or have the profit if the price of bitcoin increase.

The advice is that anyone that is accepting bitcoin should be able to convert to fiat after purchase. That can be done through payment processors. Or the seller should always have extra fiat that he can use to buy the things while hold bitcoin.

[GreatArkansas]

Let's say that most wholesalers and retailers started receiving payment for goods bought with Bitcoin. What do you think can happen to the seller when the price of Bitcoin eventually drops and he or she is about to go to market to purchase more goods into his warehouse or stores. Should the buyer that made payment with Bitcoin pay an extra charges in a situation where the Bitcoin market is not looking favourable so that the seller will not run into lost.

There are already some payment processors right now that can automatically convert Bitcoin received to a stablecoin or USD, or any fiat currency.
Or they must accept this kind of behaviour because anytime too, Bitcoin can pump, so they can earn a few bucks if that happens.

[pooya87]

Technically the payment process should not take more than a minute. It's the time when the buyer decides to purchase with bitcoin, makes the request, the merchant (backend) fetches the price and gives the user amount of satoshis they have to pay, the user makes the payment.

During this time, the price should not change significantly. It is extremely rare to see big drops or big rises in such a short time. So the payment is going to remain the same and won't be affected by the market fluctuations.

But generally you are right, the volatility (both going up and down, not just price going down) is one of the reasons why adoption of bitcoin as a payment system has been slower than adoption of it as an investment. There is not much that can be done about it either, we are still in the adoption phase and that brings in volatility.
There are third party payment processors that address that problem for the merchants by receiving the payment from buyer in bitcoin and converting it to fiat then paying that fiat to the merchant.

[Maus0728]

That would depend on the businesses to be honest, if they want to keep the payments in bitcoin as it is then they deal with the consequences that the bitcoin market is a volatile one or they can just convert it as quickly as they received the bitcoin payments, I think that it would be the most optimal thing for them to do. There is another caveat that would make not selling the bitcoin as soon as they receive the bitcoin payments though and that is having a supplier for their products accept the same payments but if they do not have that option, just go for quick convert because short-term business sustaining profits are going to be your priority and not personal finances.

[Oshosondy]

That would depend on the businesses to be honest, if they want to keep the payments in bitcoin as it is then they deal with the consequences that the bitcoin market is a volatile one or they can just convert it as quickly as they received the bitcoin payments

Convert all the payments all the time as people are buying may not be convenient, but there are payment processors that can do it for them automatically, all the seller needs is make use of the payment processor. Another advantage of the payment processor is that it can be generating different addresses to buyers so that the seller can easily know who pay without checking the txid.

[Spaceman1000$]

I think this is the main hindrance to merchants adopting Bitcoin payments. If they do, they have to use payment processors that immediately convert Bitcoin sales to fiat, which is in a way pointless.

Your absolutely correct, but I think situation like this has to do with convenience, maybe at the point of purchase the buyer has Bitcoin at the moment, and since the seller accept Bitcoin, then both can transact, so it's not entirely pointless. However just like you said, the retailer can always convert it to fiat immediately receiving the Bitcoin to avoid volatility.

[Maus0728]

That would depend on the businesses to be honest, if they want to keep the payments in bitcoin as it is then they deal with the consequences that the bitcoin market is a volatile one or they can just convert it as quickly as they received the bitcoin payments

Convert all the payments all the time as people are buying may not be convenient, but there are payment processors that can do it for them automatically, all the seller needs is make use of the payment processor. Another advantage of the payment processor is that it can be generating different addresses to buyers so that the seller can easily know who pay without checking the txid.

Exactly what I am trying to say, it is easier for businesses to do this if they plan to accept bitcoin as a payment given that they need to make a profit and hodling bitcoin is not really in their best interest given how volatile the bitcoin market is, I still am confused why people do not use it though, I mean there are already payment processors already that are good at this maybe the audit part might be the problem for most businesses I guess.

[hero_the_bossman]

BTC would be as an alternative to fiat, so if you would choose it, its price during the transaction should be final for the goods that would be received.

[Tungbulu]

Technically the payment process should not take more than a minute. It's the time when the buyer decides to purchase with bitcoin, makes the request, the merchant (backend) fetches the price and gives the user amount of satoshis they have to pay, the user makes the payment.

During this time, the price should not change significantly. It is extremely rare to see big drops or big rises in such a short time. So the payment is going to remain the same and won't be affected by the market fluctuations.

But generally you are right, the volatility (both going up and down, not just price going down) is one of the reasons why adoption of bitcoin as a payment system has been slower than adoption of it as an investment. There is not much that can be done about it either, we are still in the adoption phase and that brings in volatility.
There are third party payment processors that address that problem for the merchants by receiving the payment from buyer in bitcoin and converting it to fiat then paying that fiat to the merchant.

You’re very correct and I agree with you 100% on this one, Bitcoin’s volatility cuts both ways, volatility goes beyond just the fear of price falling, but equally price skyrocketing right you accept a payment. That kind of unpredictability isn’t something everyday commerce can put up with. Most merchants would rather prefer certainty than having to speculate, when a product is being sold today, merchants wanna know roughly what that revenue would be worth tomorrow rather than having to gamble on it.

And this is the very reason why adoption as money naturally lags adoption as an investment. The reason why volatility seems quite attractive to investors is due to its ability to create an upside, but while it’s attractive to investors, it’s equally a headache to traders as it concerns pricing goods and managing cash flow. And just like you rightly said, there’s no magic fix here, volatility is actually a symptom of being early. Any monetizing asset that’s going through price discovery is most likely guaranteed to be volatile.

[Fara Chan]

Let's say that most wholesalers and retailers started receiving payment for goods bought with Bitcoin. What do you think can happen to the seller when the price of Bitcoin eventually drops and he or she is about to go to market to purchase more goods into his warehouse or stores. Should the buyer that made payment with Bitcoin pay an extra charges in a situation where the Bitcoin market is not looking favourable so that the seller will not run into lost.

You must first determine the purpose of the seller accepting Bitcoin from the buyer. If they are simply saving for the short term, like saving money before making another purchase, then it's better for them to accept payment in cash to avoid additional fees the next time they shop. Furthermore, they must also ensure that other sellers, who sometimes don't accept Bitcoin as payment, have to exchange the Bitcoin they receive for fiat to immediately purchase the goods they want. So, you must first determine the seller's purpose in accepting Bitcoin. If the purpose is investment, there's probably nothing wrong with doing so, as long as they're willing to use other currencies for the next purchase.

[Die_empty]

Let's say that most wholesalers and retailers started receiving payment for goods bought with Bitcoin. What do you think can happen to the seller when the price of Bitcoin eventually drops and he or she is about to go to market to purchase more goods into his warehouse or stores.

Some of the people or businesses that accept Bitcoin as payment hold it as an investment. They have enough fiat reserve to purchase goods if the Bitcoin price drops. They only use Bitcoin when the price rises. Others usually convert Bitcoin to stablecoins or fiat immediately after receiving it to avoid losing value because of volatility. I have heard the privilege of interviewing some business owners in my location, and the first reason they give for not accepting Bitcoin as a form of payment is price fluctuations.

Should the buyer that made payment with Bitcoin pay an extra charges in a situation where the Bitcoin market is not looking favourable so that the seller will not run into lost.

Any business that adopts such a policy will scare away customers. Putting an extra burden on the customer is unfair.  Business owners would have to learn how to manage Bitcoin payment systems to avoid losses and put an extra financial burden on customers.

[Outhue]

Let's not forget that Bitcoin doesn't go down like altcoins, it takes time since it's not a pump and dump asset, payment solutions takes few seconds to minutes, it's very likely that your payment is completed in 30minutes and the receiver who is running a business can make a decision to either hold the bitcoin or sell for USDT.

You can ask me this question because I accept Bitcoin as means of payment in my store, I've never been trapped in price loss after I receive payment in Bitcoin, sometimes it takes me some hours to even make the Decision to either move the Bitcoin to my holding address or sell for USDT or Fiat.

[Marykeller]

I think people accept what they know. It will be out of stupidity for someone to accept something into their business without proper knowledge of it, the risk that is involved, and the ways to maneuver it.

A wholesaler or retailer that accepts Bitcoin as a means of payment should be aware of Bitcoin's price volatility. He or she won't accept Bitcoin as another payment method without knowing that the price can fluctuate up and down, bringing forth profits or losses to them, and the way they can put a stop to their losses(convert to fiat), if the price is at declines