Dell becomes the biggest e-retailer to accept Bitcoin
July 18, 2014 03:45 PM
Dell Inc., No 10 in the Internet Retailer Top 500 Guide, announced today it is now accepting Bitcoin as payment on its e-commerce site. Dell.com booked an estimated $3.55 billion in 2013 online sales.
Bitcoin is a decentralized—meaning no one organization regulates it—digital currency that buyers and sellers exchange over the Internet, with no bank involvement. The value of all the bitcoins on the market at the end of the first quarter of 2014 was estimated at $6.45 billion, according to CoinMarketCap.com, which tracks the valuations of virtual currencies across major exchanges. That value changes as new bitcoins enter into circulation and as the currency's value itself fluctuates.
Dell started accepting Bitcoin based on customer interest, a company spokesperson says, and worked with payment processor Coinbase to implement a Bitcoin payment gateway in just two weeks. “We’ve fostered a close partnership with the Dell team and that’s been instrumental in getting the Coinbase integration up and running in such a short timeframe. We look forward to continuing to support the team as they explore other ways to offer even more functionality when it comes to bitcoin payments,” says Fred Ehrsam, co-founder of Coinbase.
Coinbase also processes payments for Overstock.com Inc, which became in January 2014 the first large e-retailer to accept bitcoin. In the first 24 hours of accepting the digital currency, shoppers placed 840 orders using it, accounting for $130,000 in revenue, the retailer says. The company has since done more than $1.4 million in sales in Bitcoin. Oversock.com is No. 31 in the Top 500.
Newegg, No. 17 in the Top 500 Guide with 2013 web sales of $2.73 billion, began accepting Bitcoin early this month (Newegg and 1-800-Flowers are now accepting Bitcoin: http://www.internetretailer.com/2014/07/01/newegg-now-accepting-bitcoin). 1-800-Flowers, No. 65 in the Top 500 with 2013 web sales of $538.5 million, also began accepting the currency this month.
Jaron Lukasiewicz, the CEO of Coinsetter, a Bitcoin exchange based in New York City, thinks Dell’s acceptance of Bitcoin has more to do with the chargeback fees retailers can be charged if a fraudulent purchase is made. Retailers bear the brunt of the costs associated with these, and chargebacks are impossible with Bitcoin purchases because of the currency’s security and public ledger. “Dell’s announcement today shows that the issues merchants face with chargebacks are not limited to just small businesses,” Lukasiewicz says. “Companies of all sizes can benefit from accepting Bitcoin.”