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Bitcoin has attracted the attention of a lot of large businesses from Expedia to Dell to Overstock. However when all of those companies started accepting bitcoin, it was only in the U.S. But the tide is starting to change as more businesses expand their bitcoin acceptance overseas.
Overstock is set to become the largest later on Monday when it turns on international bitcoin payments for O.co this evening. Other retailers, like Newegg and TigerDirect, have already moved north of the border and started accepting payments from Canadian customers.
Part of the draw of opening up bitcoin payments internationally is the cost savings. Instead of dealing with the hassle of foreign currencies and high processing fees, bitcoin coming from Albania costs the same to process as a bitcoin from Alabama. It also helps minimize cases of fraud, which can be higher among international customers, thanks to the technology behind blockchain confirmations.
For Overstock, there was no “deep strategy” to roll it out to international consumers, said CEO Patrick Byrne. Instead, it was about the distribution of resources needed to implement it. Bitcoin payments currently account for one quarter of one percent of Overstock’s daily transactions, Byrne said, so the company was limited by how many resources it could dedicate to the project during its development cycle.
“(The) U.S. is a bigger share of our business. We wanted to start where the money was,” Byrne said. “For people outside the U.S. that hold bitcoin there are very few places to spend it. We have more of a lock. I think there are just more people internationally waiting to use this.”
Expanding internationally will save the company some cash, Byrne acknowledged. The “generous” approximation of four percent savings will be donated to a different bitcoin charity or foundation around the world each month, starting with the Chamber of Digital Commerce.
“[International savings] are probably a little bit larger because the fees associated with international credit cards are higher because there’s a higher incidence of fraud when you’re taking credit cards that come from eastern Europe and Asia and place like that,” Byrne said. “When you’re limiting all those costs, you’re probably going to save some costs.”
Dell, which has only been accepting bitcoin for a month, has also been seen publicly testing the waters with international customers, like in this tweet gauging the interest of Brazilian customers.
Paul Walsh, CIO of Dell’s Commerce Services, said that company is still running analytics on its state-side bitcoin sales, and it hasn’t made a decision on if and when the company would open up payments to international customers. Starting in the U.S. was just a determination of the market that possibly wanted it the most.
“We try out and test things in different markets all the time. This happened to be the market we tried bitcoin in,” Walsh said. “When we did bitcoin, we tried the US market.”
If the company did decide to scale it to international regions, the change wouldn’t be difficult to implement technically because of the way Dell has already structured its payments platform, Walsh said. Rather, the company would need to keep an eye on international bitcoin regulations before deciding where to expand to next.
For Newegg, it was a question of convenience and demand from customers. Soren Mills, chief marketing officer for the electronics retailer, said in an emailed statement that the company went to Canada first because that’s where it had offices first compared to their other international sites.
“Each country presents its own unique set of challenges with respect to bitcoin implementation,” Mills said. “We are considering those challenges carefully as we evaluate how and when to further expand our international bitcoin acceptance.”
While bitcoin-accepting businesses have so far taken a more cautious approach to expanding internationally, those that do expand overseas may see a surge in traffic from international customers who have had limited places to spend their coin online. Overstock’s Byrne said he suspects that the percentage of bitcoin purchases by international customers will be higher than the U.S.-based business. Many businesses will likely be watching to see if Byrne is right.
Featured photo by Duncan Rawlinson/Flickr