Digitec Galaxus, Switzerland’s largest online retailer, has announced it will start offering cryptocurrencies as a payment method. Time will tell whether that’s merely a marketing stunt or a milestone for crypto adoption.
From now on, customers of Digitec Galaxus can pay in cryptocurrencies. Consumers need to spend at least CHF 200 to be able to pay in either Bitcoin, Bitcoin Cash, Ether, Ripple, Binance Coin, Litecoin, Tron NEO, or OmiseGO.
The firm has generated a turnover of nearly CHF 1bn last year. Digitec sells electronics while Galaxus markets a wide range of products including fashion, household, DIY products, and jewelry.
Cooperation with exchange platform Coinify
Customers will pay through the third-party service Coinify. The Danish startup converts each crypto payment to fiat in real time. Digitec Galaxus will not hold any cryptocurrencies itself.
The checkout is pretty straightforward. Customers can choose the payment option “cryptocurrencies” and are then redirected to the Coinify website, where they can select a specific digital currency.
Coinify will fix the exchange rate for a window of 15 minutes and provide an address and a QR-code to which the user can send the payment.
Digitec Galaxus will not charge any fees, but Coinify will charge a conversion fee of 1.5 percent of the total purchase amount. Observers are criticizing the fee, which makes the payment option more expensive than electronic payment options such as Revolut.
Crypto adoption has been slow so far
The fact that a leading retailer like Digitech Galaxus is offering cryptocurrencies as a means of payment is a good sign for crypto adoption.
Merchant adoption has been slow so far. In June 2018, the travel portal Expedia dropped Bitcoin as a payment option. And so did other companies who were among the early adopters. The social media forum Reddit stopped accepting cryptocurrencies for its gold membership plans. Payment platform Stripe did the same in January 2018.
Digitec Galaxus’ announcement brings back some enthusiasm to the bitcoin-as-a-payment sentiment. For now, the payment option will only be available for Swiss customers. If it turns out successful, the company will extend it to German customers as well.
More a test than a key milestone for crypto adoption
For now, it seems the company is seeing this more as a testing phase, rather than a serious large scale adoption.
Oliver Herren, Chief Innovation Officer at the Digitec Galaxus Group, is quoted in the press release, “Cryptocurrencies are fascinating and likely to become a relevant means of payment in e-commerce – we want to support this development.”
However, he previously also said, “It is still not clear to me how blockchain is any better than other database technologies. The transactions are so far more expensive and slower than a normal payment method. Decentralization brings only cumbersome improvements. None of the blockchains scale enough. But maybe I have not invested enough time and therefore understand too little how the blockchain ecosystem works.” – which is a somewhat contradicting statement to the press announcement.
When asked why his company is offering cryptos as a payment option, he says, “Because you have some and you want to use them. Or because you cannot turn them into real money because your bank does not accept it. Or maybe just because you can and like to try new things.” Fair enough, but it doesn’t sound as if Digitec Galaxy is overly convinced yet.
While the company’s move is is a good sign for crypto adoption, it remains unclear whether or not customers will use the crypto payment option. Most retail customers don’t have a particular fancy for digital currencies; they want to use the cheapest and most convenient means of payment.
Thus, it’s likely that the crypto payment option will only be used by customers who hold cryptocurrencies and don’t know what to do with them. Digitech Galaxy might also score points with younger, tech-savvy customer segments. Other retailers, however, will only follow once they see the crypto payment option is really being used.