Price spread when cashing in bitcoin sales

[petersmall]

I'm contemplating creating an e-commerce site that accepts bitcoin. But, I'm a bit confused as to the amount of discount that I'll lose by using bitcoin.

Now I understand that the transfer from one bitcoin account to another bitcoin account is practically cost free (zero discount). However, a buyer on my site would have to buy bitcoins to make a purchase and then I'd have to sell the bitcoins to receive payment for the trade in my local currency. Doesn't this make the discount on the sale proportional to the difference between bid and offer prices?

For example, if a customer paid $100 for the amount of bitcoin needed to buy my product,, how much would I get in dollars after I have exchanged her bitcoins to my local currency (use any currency and today's current - or BitPay's - bid and offer prices to provide an answer).

Peter Small

[1715296046]

1715296046

[1715296046]

1715296046

[1715296046]

1715296046

[lihuajkl]

You can use the bitcoin payment processing companies such coinbase, the price of your products is showing at bitcoin based on the latest price on the exchange. Once the bitcoin payment is received by you, it can be converted to fiat immediately and eliminate the exchange risk. You end up receiving the dollar from your sales.

[petersmall]

Thank you lihuajkl,

That is the solution I was hoping for. Now I have to investigate the best service for providing this immediate exchange facility. Is there a list of the possible options?

[panju1]

You can use the bitcoin payment processing companies such coinbase, the price of your products is showing at bitcoin based on the latest price on the exchange. Once the bitcoin payment is received by you, it can be converted to fiat immediately and eliminate the exchange risk. You end up receiving the dollar from your sales.

I would like to add that there is 1% fee for converting fiat to bitcoins for the customer. For the merchant, the service is free until a threshold amount, after which a charge of 1% is applicable. There is no fee applicable if the merchant chooses to retain bitcoins.

While charges are still applicable, this is nothing compared to credit card companies.

[BlindMayorBitcorn]

You can use the bitcoin payment processing companies such coinbase, the price of your products is showing at bitcoin based on the latest price on the exchange. Once the bitcoin payment is received by you, it can be converted to fiat immediately and eliminate the exchange risk. You end up receiving the dollar from your sales.

I would like to add that there is 1% fee for converting fiat to bitcoins for the customer. For the merchant, the service is free until a threshold amount, after which a charge of 1% is applicable. There is no fee applicable if the merchant chooses to retain bitcoins.

While charges are still applicable, this is nothing compared to credit card companies.

Who charges a 1% fee for converting fiat to bitcoins exactly?

[senseless]

If you handle the cashing out of bitcoins yourself instead of paying someone else to do it you can get above market rates on localbitcoins.

[botany]

You can use the bitcoin payment processing companies such coinbase, the price of your products is showing at bitcoin based on the latest price on the exchange. Once the bitcoin payment is received by you, it can be converted to fiat immediately and eliminate the exchange risk. You end up receiving the dollar from your sales.

I would like to add that there is 1% fee for converting fiat to bitcoins for the customer. For the merchant, the service is free until a threshold amount, after which a charge of 1% is applicable. There is no fee applicable if the merchant chooses to retain bitcoins.

While charges are still applicable, this is nothing compared to credit card companies.

Who charges a 1% fee for converting fiat to bitcoins exactly?

Coinbase does
https://support.coinbase.com/customer/portal/articles/585625-what-is-coinbase-and-how-much-does-it-cost-to-use-

[teukon]

For example, if a customer paid $100 for the amount of bitcoin needed to buy my product,, how much would I get in dollars after I have exchanged her bitcoins to my local currency (use any currency and today's current - or BitPay's - bid and offer prices to provide an answer).

If the customer has dollars and you wish to receive the same currency then there will probably be faster, cheaper, more mainstream options out there than using Bitcoin as an intermediary.  The fees are low but, as you note, the spread is a pain.

Bitcoin really makes more sense when the customer has bitcoins and/or you wish to receive bitcoins.  Additionally, Bitcoin can sometimes be pretty efficient if your customer's local currency is different to your own (in which case you'd have to deal with an FX spead at some point anyway).

Now I have to investigate the best service for providing this immediate exchange facility. Is there a list of the possible options?

The company BitPay your referenced is one option.  Acting as a payment gateway for merchants to receive local currency while customers shop with bitcoin is their main business.

[BootstrapCoinDev]

Now I have to investigate the best service for providing this immediate exchange facility. Is there a list of the possible options?

The company BitPay your referenced is one option.  Acting as a payment gateway for merchants to receive local currency while customers shop with bitcoin is their main business.

BitPay doesn't entirely show the 'Bitcoin' is actually a different currency. They show their service as an alternative form of payment.
As a result, they did not yet provide any function that will convert your dollars into bitcoins on your site. (Not even some cheap javascript version.)

[Q7]

I think as in your case you will want to work out the best in terms of lowest price to offer to your customer and at the same time get the highest return when exchanging btc back to your local currency. The best way is to work out a deal with an exchanger that give the lowest spread in terms of bid and offer price. Bitpay is just one of the many around

[malaimult]

You would actually probably actually gain money by accepting bitcoin if you did not offer any kind of discount for customers using bitcoin.

While you will generally pay some kind of fee, generally 1% if you use coinbase/bitpay or roughly half that if you manually sell your bitcoin on an exchange, you will end up saving costs associated with credit card fraud and the cost of processing credit card transactions which generally exceeds 3% of sales.

[botany]

You would actually probably actually gain money by accepting bitcoin if you did not offer any kind of discount for customers using bitcoin.

While you will generally pay some kind of fee, generally 1% if you use coinbase/bitpay or roughly half that if you manually sell your bitcoin on an exchange, you will end up saving costs associated with credit card fraud and the cost of processing credit card transactions which generally exceeds 3% of sales.

You can consider passing on a portion of this saving to customers.
This would encourage people to use bitcoin.

[malaimult]

You would actually probably actually gain money by accepting bitcoin if you did not offer any kind of discount for customers using bitcoin.

While you will generally pay some kind of fee, generally 1% if you use coinbase/bitpay or roughly half that if you manually sell your bitcoin on an exchange, you will end up saving costs associated with credit card fraud and the cost of processing credit card transactions which generally exceeds 3% of sales.

You can consider passing on a portion of this saving to customers.
This would encourage people to use bitcoin.

Exactly. I predict that this will happen over the long term as merchants realize how much less they are spending on coinbase processing verses credit card processing