Daniel Lee has been accepting Bitcoin at his family's seven retail stores in Fort Greene, Brooklyn since March 2013 by having customers send the digital currency to wallet addresses he manages.
"Bitcoin is designed so well for small business owners," says Lee. "Credit cards are built against small business owners; it's laughable. Ten years from now I'm very confident we won't be using credit cards," he says.
Although Lee has his own process for handling Bitcoin, one of his vendors now provides another option. One of Lee's stores, Green Ave Market, uses Revel Systems' iPad point of sale system, which recently added a Bitcoin acceptance function.
Lee, the store's manager, has not only benefitted from the gains in Bitcoin's price since he started accepting in 2013, but also the exposure for his businesses. Lee's shops have been featured on multiple news spots. "The Bitcoin community is very passionate and actively seeks out merchants that accept," he says.
Lee gives a 10% discount to customers who pay with Bitcoin, which happens a few times a day across all the stores, Lee says. One regular customer commutes from Manhattan every week to buy groceries with Bitcoin at Greene Ave Market, he says.
However, most customers still pay with conventional payment methods. "Right now, we're not doing high volume with Bitcoin; about 95% of people still don't know what Bitcoin is," Lee says.
Merchants use Bitcoin for its low cost, near-real-time settlement and built-in barrier against chargebacks, says Chris Ciabarra, chief technology officer at Revel Systems.
About 30 clients requested Revel add Bitcoin acceptance, so the vendor began working with Coinbase, a San Francisco-based Bitcoin wallet and merchant services provider. "We also have partners willing to give us customers to do the Bitcoin integration," Ciabarra says.
While Lee appreciates the addition to Revel's software, he says he might continue to manage Bitcoin payments through his own process. Lee has had some past support issues with Revel, and his current process for handling Bitcoin payments allows him to track payment and store activity separately for each location, he says.
To accept Bitcoin in Lee's stores, new customers must send a text message to his phone. He then replies with the store's wallet address. Cashiers then ring up the transaction on the point of sale terminal as a check.
After the first payment, Lee's Bitcoin address will be saved to the customer's wallet so the next purchase will be more effortless.
He also has an account with BitPay, which allows him to immediately convert Bitcoin payments to U.S. dollars, but doesn't use it. Lee prefers to hold a Bitcoin balance in his own Bitcoin wallet.
In this way, Lee's Bitcoin transactions only cost fractions of a cent for a fee he pays to a Bitcoin
Several Revel clients, such as Five Markets Grocery Store in San Francisco, have been beta testing the Bitcoin capability for about a week.
Five Markets hasn't had any customers offer to pay with Bitcoin yet, but owner Evelyn Fong says the digital-currency feature "was quite attractive because the majority of my clients carry smartphones and don't usually pay with cash."
Five Markets also accepts PayPal, which lets customers check in to the store and pay from the PayPal smartphone app.
"It's just another convenient form to pay without needing cards at all but people always have their phone," Fong says. "For the convenience I think people will start using Bitcoin."
Coinciding with the Bitcoin integration,
