David Daneshgar, co-founder of BloomNation.com, participated in a compelling Q&A with Loyalty360 to discuss his company’s recent announcement about accepting the virtual currency Bitcoin.
Bitcoin is a distributed peer-to-peer digital currency that functions without the intermediation of any central authority. It’s also known as a cryptocurrency since it uses cryptography to prevent double spending.
Bitcoin is an innovative payment network. The management of transactions and the issuing of Bitcoins are carried out collectively by the network. Bitcoin is open-source. Its design is public. No one owns or controls Bitcoin and anyone can take part.
One advantage for merchants using Bitcoin includes lower transaction fees than credit cards.
While some have doubted Bitcoin’s validity and others have raised concerns that the unregulated currency, a U.S. judge ruled last August that Bitcoin, which has been around since 2009, is a real currency.
Why did BloomNation decide to accept Bitcoin?
As a startup, we believe in being innovators in our industry. The online floral industry has been somewhat inefficient, especially with companies like 1-800-Flowers and FTD being enormous clearinghouses in-between the flower buyer and the florist. Their model has not really evolved and we feel like we can be faster to adopt innovative solutions. Bitcoin is a great example of that and we wanted to reach a new demographic of flower buyers that globally may never have known of some of our local florists otherwise. Those that use Bitcoin tend to be much more tech savvy and really love marketplace businesses that are disrupting antiquated incumbents.
How does this make the shopping process easier?
Upon typing in your zip code and finding the local floral piece of your choice, you are prompted to pay by either credit card or Bitcoin. We use Coinbase since it is an easy solution for those wanting to pay with Bitcoin, and they convert the money instantaneously to the dollar to help us with mitigating the risks associated with Bitcoin volatility.
Why should people use Bitcoin to buy flowers from BloomNation? What is their incentive?
I think it is really about them supporting Bitcoin as an innovative currency. We have noticed those who use Bitcoin have an average bouquet value of 50% more than the average credit card user. This is a huge difference and I think it can be attributed to the Bitcoin community that gets behind the merchants who are supporting their vision and their currency.
Why are more businesses using this virtual currency?
First off, it gives you a great new demographic of consumers, many of whom have seen an appreciation of the currency and want to shop now while supporting the businesses that support them. Secondly, as a merchant, you don’t have to worry about charge backs or fraud, which is a big deal. Third, it gives you a leg up on the competition as you become an innovator and service this specific niche first. Lastly, the processing fee has been fractionally what it would be with processing a credit card.
What are your goals for this payment program?
Our goals are to allow flower lovers all over the world to be able to buy from our talented local florists with the new digital currency that we believe is going to make a lasting impact in ecommerce for quite a while.
What would you say to people who are leery about using Bitcoin?
I would say, at least on the merchant side, that it has allowed us to increase sales, increase average order size, attract a very targeted demographic and lower your average processing fee. I would definitely suggest ecommerce merchants adopt it.