Making payments with Bitcoins

[Hazink]

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.

The buyer doesn't really need to pay extra in such a situation; the person who is selling should be able to know the risk involved before they start accepting payments in Bitcoin. Let's also look at it from the other area: what if the Bitcoin price increases before the owner of the shop decides to sell it off? Will he or she call the buyer back and give some back to them?

The safest way to accept bitcoin in your business and not incur some noticeable loss is to either have a very big business where all the received Bitcoin can be seen as a reserve or use a payment processor where you can easily convert the received bitcoin based on market value and forget about running a loss when the price drops down.

[Fiasem20]

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.

It’s not the duty of the buyer to recover the loss of the seller,it was never the buyer that made the decision for the seller,they only made a payment and left and anything afterward got nothing on them.Volatility has been the reason why majority of sellers don’t accept bitcoin as a payment option,in my own perspective if I would want to accept bitcoin as a payment option I wouldn’t use it for restocking rather it would be on the basis of holding for the long term.In essence I would accept fiat payment method for restocking and part of bitcoins for holding.

[d5000]

This thread is active since three months already, but I have missed some arguments in the discussion:

1) Bitcoin essentially competes with credit cards. Credit card charges in my country are between 3 and 8% of the value of the receipt. This means, if the business accepts Bitcoin and the price crashes 3-8%, they have lost only as much as they'd have lost if they payment had been made via credit cards. And they even don't have to deal with chargebacks and other types of fraud ... (Debit cards and bank transfers have lower and/or no fees, but they're not as popular in e-commerce.)

2) Bitcoin's price until now is much more likely to go up than to go down. Long term SMAs have an average growth of about 20% per year. Thus on average, the merchant earns money and doesn't lose.

3) There is not really a need for payment processors, they are quite expensive and sometimes require KYC. The merchant can also simply use a traditional exchange. This is often cheaper (fees about 0.5% instead of 1-2% for a payment processor) and has the advantage that they can decide how much of their earnings they'd exchange to a "stable" currency like the USD or stablecoins.

Said that, there is really no need to charge a "volatility fee" for the merchant. In most cases they're better off than if the payment was made with a credit card.

[ThemePen]

The buyer doesn't really need to pay extra in such a situation; the person who is selling should be able to know the risk involved before they start accepting payments in Bitcoin. Let's also look at it from the other area: what if the Bitcoin price increases before the owner of the shop decides to sell it off? Will he or she call the buyer back and give some back to them?

The safest way to accept bitcoin in your business and not incur some noticeable loss is to either have a very big business where all the received Bitcoin can be seen as a reserve or use a payment processor where you can easily convert the received bitcoin based on market value and forget about running a loss when the price drops down.

It is big problem in crypto buying to decide who takes risk in case of changes in Bitcoin prices since it seems unfair to ask buyers to pay more, but it is not safe when small stores lose money before they can even pay their bills. It is true that shop owner will keep extra gain as prize for their risk in case price goes up, but to most of small business owners, mind load of watching price maps is not worth prize. I think it seems like paying small fee to auto change service is same as paying swing protection because then you can be doing your business and know that your money is not going to be lost if market falls suddenly. No matter if company will keep set amount of Bitcoin for safety or change them all into stable coins such as USDC, idea is to make sure that digital payments become as stress free as normal ones.

[fikrett]

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.

It’s not the duty of the buyer to recover the loss of the seller,it was never the buyer that made the decision for the seller,they only made a payment and left and anything afterward got nothing on them.Volatility has been the reason why majority of sellers don’t accept bitcoin as a payment option,in my own perspective if I would want to accept bitcoin as a payment option I wouldn’t use it for restocking rather it would be on the basis of holding for the long term.In essence I would accept fiat payment method for restocking and part of bitcoins for holding.

Seller accepted the terms of the buyer and vice versa. So I agree with you

[Somegory]

Businesses that are receiving Bitcoin do have the time to exchange Bitcoin to fiat or stable coin if they want, it takes less than a minute to trade the Bitcoin instantly to retain that present price to avoid Volatility.

Merchants who don't want hold their Bitcoin because of business or some other reasons just need to get smarter, I have read online before about how one can set up a crypto wallet to automatically send funds out to the exchange once the transaction is completed.

I can't remember how but I am pretty sure that it's possible, I understand that it's not all businesses that can hold Bitcoin for long term like Micro strategy and others but it's a good plan to have Bitcoin backing up your business.

If I end up doing something similar I will keep part of the profits I made in Bitcoin for future purposes.

[alexandr1115]

This thread is active since three months already, but I have missed some arguments in the discussion:

1) Bitcoin essentially competes with credit cards. Credit card charges in my country are between 3 and 8% of the value of the receipt. This means, if the business accepts Bitcoin and the price crashes 3-8%, they have lost only as much as they'd have lost if they payment had been made via credit cards. And they even don't have to deal with chargebacks and other types of fraud ... (Debit cards and bank transfers have lower and/or no fees, but they're not as popular in e-commerce.)

2) Bitcoin's price until now is much more likely to go up than to go down. Long term SMAs have an average growth of about 20% per year. Thus on average, the merchant earns money and doesn't lose.

3) There is not really a need for payment processors, they are quite expensive and sometimes require KYC. The merchant can also simply use a traditional exchange. This is often cheaper (fees about 0.5% instead of 1-2% for a payment processor) and has the advantage that they can decide how much of their earnings they'd exchange to a "stable" currency like the USD or stablecoins.

Said that, there is really no need to charge a "volatility fee" for the merchant. In most cases they're better off than if the payment was made with a credit card.

How exactly does Bitcoin compete with credit cards?? You’re talking about the interest rates from using a credit card, and then for some reason you start comparing them to the price of Bitcoin! Don’t you think you’re comparing completely different things that shouldn’t be compared??

[Nothingtodo]

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.

When you accept or pay through Bitcoin in the retail and wholesale markets, if the Bitcoin market suddenly crashes, it will definitely be a loss for the customer or seller. But after accepting payments through Bitcoin, you have to convert it into a stable coin immediately.
Or you have to accept payment in stablecoins before making the payment. Moreover, due to the unstable state of the Bitcoin market, most stores do not accept Bitcoin as payment yet.

[d5000]

How exactly does Bitcoin compete with credit cards?? You’re talking about the interest rates from using a credit card, and then for some reason you start comparing them to the price of Bitcoin! Don’t you think you’re comparing completely different things that shouldn’t be compared??

No, I didn't refer to the interest rates, but to the fees charged to the merchants by the credit card payment processor.

It's true that from the customer's point of view, credit cards have an advantage, because you can buy goods for a loan or in installments. That's something Bitcoin of course doesn't offer, at least not directly. However, many are using credit cards primarily for convenience even if they do not need these features, because it's easy to chargeback the money if something goes wrong. And in this scenario, Bitcoin does compete.

Once Bitcoin becomes less volatile, merchants may even be able to offer special discounts if you pay with Bitcoin due to the advantages I mentioned in the previous post (less fees, no chargeback risk) and also the faster settlement (1 hour compared to about 1 week or more). In this case, customers would face another advantage if they pay with Bitcoin. I think however currently the hedging costs are still too high for that scenario, although in some cases (e.g. digital goods) where the volume of sales is more important than the cost of the goods, it could already sense for some merchants, for example for digital artists (like musicians/bands) who sell their own stuff.

[SquirrelJulietGarden]

However, many are using credit cards primarily for convenience even if they do not need these features, because it's easy to chargeback the money if something goes wrong. And in this scenario, Bitcoin does compete.

With Bitcoin, there is no reversible transactions and with each more confirmation, the transaction security becomes bigger. People can wait for 1, 2, 3 or 6 confirmations before considering that their trade was completed successfully with their trade partner. It can depend on their trade value then they will wait for shorter or longer time.

1 confirmation: sufficient for small payments less than $1,000.

3 confirmations: for payments $1,000 - $10,000. Most exchanges require 3 confirmations for deposits.

6 confirmations: good for large payments between $10,000 - $1,000,000. Six is standard for most transactions to be considered secure.

10 confirmations: suggested for large payments greater than $1,000,000.

https://blog.lopp.net/how-many-bitcoin-confirmations-is-enough/
https://en.bitcoin.it/wiki/Irreversible_Transactions

[suhadi88]

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.

If there are regulations, it will be easy, but if some still prohibit it, it will be a bit difficult. But I think that time will come sooner or later, and it will become a reality, not just the items you mentioned, but much more. Yes, BTC offers a digital financial solution for the future.

[Hatchy]

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.

Why would anyone want to pay extra charges just to use bitcoin as a payment method? The idea is simple before any seller makes a decision to add bitcoin payments, he should be aware of price volatility and ways to counter it. If he's someone that looks to long term bitcoin investments, he should be smart enough to convert every of his received coins to a long term investment plan. That way he doesn't have to worry about purchasing bitcoin using fiat. Also he can make arrangement to convert his bitcoins to stable coins immediately he's done for the day or after sale for the week to avoid his profits going back to the market. He doesn't need to put the extra charges on his customers as that might chance them away..

[Pablo-wood]

What if feel is right for businesses accepting Bitcoin as payment option. Payments made through Bitcoin should be marked as investment portfolio and not for restocking their stores or warehouses. Reasons been that Bitcoin payment option don't come in too often. Payment made through fiat can be used to run the business that way it will be easier to both invest and run the regular business with the view of higher ROI when the cycle is ripe while making expenses from the fiat payment received in the cause of the business.

Payment received in bitcoin most times increases of decreases within 1-2 weeks and those are likely period where business restock their businesses. If it turns out negative they are already at loss, so it is best to keep them locked in as investment plan.

[Wiwo]

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.

Sad reality will be, if the seller keeps his or her capital in bitcoin, then he will end up losing if the price of bitcoin dropped and he is forced to make purchase to refill his stock for buyer's.

But most companies that accept cryptocurrency, are all storing them in stable coins like USDT which have a standard value and with not volitilities like other assets like bitcoin.

[iBaba]

~~~

It’s not the duty of the buyer to recover the loss of the seller,it was never the buyer that made the decision for the seller,they only made a payment and left and anything afterward got nothing on them.Volatility has been the reason why majority of sellers don’t accept bitcoin as a payment option,in my own perspective if I would want to accept bitcoin as a payment option I wouldn’t use it for restocking rather it would be on the basis of holding for the long term.In essence I would accept fiat payment method for restocking and part of bitcoins for holding.

But how practical is it for a retailer selling provisions at a store to be taking payments using bitcoin instead of fiats or stablecoins like USDT Tether when we know very clearly that bitcoin undergoes volatility with no respecter to anyone including the seller who decided they will take their payments in bitcoin.

Most of our small and medium sized businessowners especially those involved in buying and selling of goods such as commodities will find it extremely difficult to make use of bitcoin because they mostly restock after a week or two or after a month and keeping the money in fiat is really a problem for them to deal with the value of the currency. We are also not discussing about the transaction fee which will make it increasingly difficult to take transactions meant for day to day business in bitcoin.

[Muba20]

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.

The buyer of the product will never take responsibility for this because when he paid for the payment, he paid according to the fixed price, so why should he be responsible for the decrease later? This is never possible. If this happens, no one will agree to pay him with Bitcoin and this problem remains in reality. Bitcoin's volatility is very high. If a product seller accepts Bitcoin as a payment medium, then he will have to bear the profit or loss due to volatility. In this regard he will not always lose, he can also profit. But since he always has to sell the product and keep buying it again. He must use large capital and definitely keep holding it there. If he cannot be a big holder, then it will definitely be challenging for him to accept payment with Bitcoin.

[gunhell16]

Why is it necessary to give additional charge to buyers? I think it is not necessary, because in the first place sellers should know that because that is how Bitcoin is designed, with its volatility. Then this is just a hypothetical question: Why would any merchant who accepts payment do something like this and complain when the value of bitcoin dropped?

If the seller had decided to do this in his business from the beginning, he would definitely be aware of such situations if there ever were a drop in the price value of bitcoin
in the crypto market.

[silpersurfer]

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.

Sad reality will be, if the seller keeps his or her capital in bitcoin, then he will end up losing if the price of bitcoin dropped and he is forced to make purchase to refill his stock for buyer's.

But most companies that accept cryptocurrency, are all storing them in stable coins like USDT which have a standard value and with not volitilities like other assets like bitcoin.

Of course it should not be stored in bitcoin for too long even though it uses bitcoin as a medium of exchange because the price is still volatile it is not suitable in talking trade, this will be very dangerous because it can reduce the value of the exchange rate, so the only way when customers pay with bitcoin the merchant must convert to a currency whose value is not volatile such as stable coins to maintain the exchange rate to be spent back to fill the stock of goods, there is no other way that is better than this in optimizing the use of bitcoin in doing business.