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The Case for Commercializing Cryptocurrencies

BY CSA STAFF

By Tyler Roye, Co-founder and CEO, eGifter

Recent innovations in digital payments have helped move e-commerce from just online on desktop browsers to mobile and social, which has opened new channels for retailers to drive revenue and gain loyalty. But more channels have also opened the door to new challenges. One of the largest issues retailers face is how to deal with fraudulent ecommerce transactions from mobile devices. New solutions are emerging, but they add layers of cost and complexity.

In an effort to find a solution, retailers are paying close attention to emerging payment options. One of the most discussed solutions is the use of cryptocurrencies, of which Bitcoin is the most prominent.

These digital, encrypted coins that can be easily and securely passed between users have the potential to change the way payments are received and processed in digital commerce. Cryptocurrencies solve several of the most complex digital ecommerce payment solutions problems, such as high transaction fees and credit card data security, while drastically reducing fraud risk. This is music to the ears of online merchants who bear the full fraud risk of card-not-present (CNP) transactions.

Still, there are remaining barriers that need to be overcome before widespread adoption among large U.S. retailers can really take off. Like any transformational technology, there needs to be additional infrastructure investment from large, well-capitalized companies before cryptocurrencies can gain a foothold.

Some retailers are already feeling the benefits of these new currencies, as Bitcoin use is slowly spreading into the mainstream. From larger, more well-known names to small businesses and startups, companies have been making news for accepting Bitcoin. Recent examples of larger retailers who accept the digital currency directly include Overstock.com, Shopify and TigerDirect.com, and most recently, Dish Network.

In April, mobile POS vendors Square and Stripe both added Bitcoin as a payment option. With more than 250,000 merchants on its platform, Square’s move to more flexible payment solutions demonstrates its potential to speed early adoption among both retailers and consumers, especially in the small business space.

More investment should be coming. Cryptocurrencies offer too many benefits to be ignored: tighter security, lower transaction costs, and lower risk are too valuable in the digital commerce world for a solution offering them all to be overlooked.

Why Retailers Should Accept Bitcoins

For retailers, the arguments for accepting Bitcoin center on costs and risk.

More evidence of mainstream adoption will be critical, and this is likely to come as companies like Circle work on addressing the gating issues slowing mainstream adoption. In December of 2013, Bitcoin’s market capitalization reached $12 billion, according to Blockchain. It’s since tailed off a bit, but there are still billions of dollars in Bitcoins in the market. The current users of Bitcoin are in fact consumers and they are looking for places to spend their coins. Because relatively few retailers yet accept cryptocurrencies, word of mouth in the Bitcoin community can drive thousands of transactions through digital channels, creating a loyal group of brand devotees. This is a benefit some forward-thinking retailers are already realizing.

Bitcoin and other cryptocurrencies provide a way for smaller retailers to compete with the e-commerce giants. While large retailers can negotiate much lower credit card transaction fees, smaller retailers can’t. Bitcoin transactions are instantaneous, cashless, and have much lower fees than credit card transactions. In very low margin businesses, this lower cost can be material.

Still, the regulatory uncertainty of Bitcoin is a problem for some in terms of legitimacy, which may cause risks. For retailers looking to get in early but avoid the regulatory risk, there are a couple of ways brands can indirectly accept digital currencies for their goods and services today with little or no risk:

1. Work with a Bitcoin processor to instantly transact Bitcoins into your favorite currency after a sale is complete. This also reduces risk exposure to currency fluctuations.

2. Partner with startups piloting new offerings. This method still shields the brand from any risk within the currency, while simultaneously allowing them to take advantage of a third-party distribution channel for their digital gift cards.

Bitcoin is Just the Starting Point

These are just some of the factors that businesses should consider when thinking about whether payment flexibility and innovation online or at the point of sale is worth the investment.

Cryptocurrencies are not the be-all-end-all for the future of payments, but they are an interesting piece of the emerging payments landscape that should not be overlooked. There are many interesting commercial alternatives emerging. Some indicators point to the possibility Facebook may offer a payment system that could eventually be an alternative to PayPal.

It’s exciting to think about what the future holds for digital payments, but the message is clear – digital currencies are here to stay and will continue to evolve. The important takeaway for retailers is that modern commerce must incorporate strategies for frictionless, low risk mobile transactions. Embracing these changes is a key opportunity to gain a competitive edge.


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Sealed Air relocates HQ to N.C. from N.J.

BY CSA STAFF

Charlotte, N.C. will be home to the new global headquarters of Sealed Air Corp., as the global packaging company opens a state-of-the art, environmentally-sustainable campus to house its research and development facilities and corporate offices.

The $7.7 billion company said over the course of the next three years it will relocated roughly 1,300 jobs to North Carolina from its existing headquarters in Elmwood Park, N.J., and other facilities nationwide. Sealed Air employs roughly 25,000 people and is known for brands such as Cryovac, Bubble Wrap and Diversey.

“We are confident Charlotte will provide a great environment for us to operate and grow our business moving forward. This move will contribute to a stronger, one-company culture that will enable greater collaboration, efficiencies, and better use of our investments in people and new technologies,” said Jerome A. Peribere, president and CEO of Sealed Air.

Sealed Air will continue to maintain manufacturing in its Saddle Brook, N.J. and Danbury, Conn., facilities, as well as certain operations in Duncan, S.C. The Company’s Simpsonville and Seneca, South Carolina sites will also continue their manufacturing operations.

“We considered numerous criteria in making our decision.” said Peribere. “We believe Charlotte’s many attributes, including its solid economy and its reputation for business friendliness, technology and innovation, make it an ideal place for our employees to live and work.”

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Amazon expands prime music selection

BY CSA STAFF

Amazon has added hundreds of thousands of songs and hundreds of new, expert-programmed Prime Playlists to its Prime Music catalog.

The newly added selection includes songs from artists new to the Prime Music catalog, as well as additional tracks from artists already in it, such as David Guetta, Al Green, Miles Davis, Kendrick Lamar, Linkin Park, Shakira, Deadmau5, Ella Fitzgerald, Edward Sharpe & The Magnetic Zeros, Neil Young, DJ Snake & Lil Jon, Young the Giant, A$AP Rocky, Elvis, Oasis, Kacey Musgraves, Ray Charles, Panic! at the Disco, Wyclef Jean, Nick Cave and The Bad Seeds, Skrillex and John Coltrane.

Meanwhile, Prime Playlists include “Upbeat Indie Vibes,” “Electronic Beats for Work,” “Rainy Day Jazz,” “Jack White and More,” “Bass Drops and Fist-Pumps” and “Justin Timberlake’s Top Songs.”

“The response we’ve had to Prime Music has far exceeded our expectations and we’re excited to make Prime Music even more valuable for Prime members,” said Steve Boom, VP of digital music for Amazon. “Prime Music was introduced just a little more than a month ago and we’ve already significantly expanded the Prime Music catalog. Prime members have been telling us how much they love Prime Playlists, so we’re also pleased to offer hundreds of great new playlists to make it easier to enjoy the best of Prime Music.”

Prime Music launched on June 12, giving millions of U.S. Prime members unlimited, ad-free access to more than a million songs at no additional cost to their membership. Prime Music is the latest benefit of Amazon Prime and joins unlimited Free Two-Day Shipping on more than 20 million items, unlimited streaming of tens of thousands of popular movies and TV episodes through Prime Instant Video and access to more than 500,000 books to borrow for free with the Kindle Owners’ Lending Library.

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