Though digital currency has undeniably accumulated a strong following among consumers in Europe, the region has arguably trailed the US market in one notable area – high-profile merchant adoption.
Despite a number of mid-size merchants such as AirBaltic, 220volt and most recently Shipito joining the growing ranks of bitcoin merchants worldwide, a merchant with the revenue and notoriety of DISH, Expedia or Overstock has yet to become part of the region’s bitcoin ecosystem.
However, according to BitPay director of European business development Moe Levin, this narrative may soon change. He told CoinDesk:
“The sales cycle for merchants in Europe is longer than North America, I think that’s the real difference in not seeing the billion-dollar companies here. Soon to be announced though.”
Throughout the interview, Levin stressed that while BitPay may not be making headlines in Europe, the reasons for this are cultural. Europeans simply see bitcoin as a less sensational, more practical business solution that can help them save on operational costs.
“There are not so many big statements from people here, but everyday like clockwork more and more merchants are turning on BitPay’s service, because it isn’t a stretch. They don’t need to be convinced the same way North Americans do,” Levin added.
But, while the efforts haven’t yet yielded headlines, Levin explained that BitPay is adding roughly 200 new merchants to the ecosystem each week, and that in doing so, it’s produced valuable insight into how European business owners are thinking about bitcoin.
Defining the European bitcoin merchant
Levin indicated that, so far, BitPay hasn’t seen a notable difference between the demographics of its US or European customers. In both regions, its merchants are primarily focused on winning bitcoin’s main demographic – tech-savvy males, ages 18 to 45 years old.
“The best merchants are the ones that target this demographic exclusively. So we’re talking about electronics, travel, apparel and online purchasing,” Levin explained.
The company’s ability to penetrate each country, however, differs greatly. Levin indicated that while adoption is high among merchants in noted tech hubs such as Berlin, Frankfurt and Munich, countries like Austria lag behind due to their older, less tech-minded demographics.
Still, Levin suggested that bitcoin may have the best chance of achieving wider adoption in areas where bitcoin better competes against the available fiat alternatives, adding:
“For the longest time the highest hits and search volume [on Google for bitcoin] has been from Estonia, the Netherlands and some of the Baltic and Scandinavian countries.”
Currencies are a way of life
Still, there are historical and cultural factors that make the European merchant market unique. For example, Levin noted that the transition to the euro, while 15 years in the past, has opened up European merchants to thinking more critically about currency.
“People have been accustomed to so many currencies for such a long time that bitcoin is not a foreign idea. A bigger eurozone is a worldwide currency,” he remarked.
Levin also suggested that Europeans are naturally more hostile to fees from banks and financial providers, whereas in North America, these costs are viewed as part of doing business, adding:
“Here they’ve had enough of it already. They say listen the banks have done questionable things for a long time, they say that’s enough of that, why should we be paying fees? They don’t have the trust in banks that North Americans generally do, so it’s on their minds.”
E-commerce growth key to adoption
Levin also addressed another potential area where bitcoin can aid European merchants – cross-border payments, which he described as surprisingly uncommon given the geographical proximity of the region’s member states.
“In Europe, I don’t know what the reason is, but many people shop from the national e-commerce giants, and that’s changing. Obviously, there’s Amazon that’s strong here and there are some other big players, but they’re still shopping nationally.”
Bitcoin, Levin said, could be the key to helping European consumers break down these barriers of conventional commerce, citing it as a strong selling point that could become more prevalent in the future.
He added: “Cross-border shipping is growing, and it means that bitcoin can assist with that.”
Roadblocks to adoption
Levin acknowledged that BitPay faces a number of challenges in Europe, however. In particular, he noted that due to a variety of local payment options, merchants aren’t always able to put bitcoin first. He explained:
“[Merchants] don’t prioritize [bitcoin] over turning on an Estonian payment option or an Italian payment option, so from the company’s perspective, they may put bitcoin on a 2015 list.”
He also pointed to the relative efficiency of existing payment networks in Europe, citing them as stronger than those currently in place globally. For example, he mentioned the iDEAL payment network in the Netherlands, which allows customers to pay for Internet purchases using online bank transfers.
Introduced in 2005, the system processed more than 142 million transfers in 2013.
“In the Netherlands, to send money bank to bank, it takes a second. It’s just as fast as sending bitcoin,” Levin noted.
Focus on Europe
Of course, Europe is not only important for bitcoin, the market also poses a strategic relevance for BitPay, which is seeking to become the leading global bitcoin payment processor. While it faces competition from Coinbase in North America – the San Francisco startup that currently boasts big clients such as Overstock and Dell, that company has yet to prioritize Europe in a similar way.
Since closing a $30m Series A round in January, BitPay has been seeking to further its influence in Europe, adding key investors in the region such as Virgin Galactic’s Sir Richard Branson and opening its European headquarters in April.
Levin said that, as such, BitPay has ambitious benchmarks for enrolling merchants this year, concluding:
“We have benchmarks toward the end of the year to have another 30,000 to 40,000 merchants. The benchmarks are there, the main thing we’re dealing with now is absorbing all the demand.”
Disclaimer: CoinDesk founder Shakil Khan is an investor in BitPay.
Despite a number of mid-size merchants such as AirBaltic , 220volt and most recently Shipito joining the growing ranks of bitcoin merchants worldwide, a merchant with the revenue and notoriety of DISH , Expedia or Overstock has yet to become part of the region’s bitcoin ecosystem.
However, according […]