A new online electronics superstore is catering to consumers who prefer to pay with bitcoins.
Bitcoinstore, an online seller of computers, monitors, cameras and other electronics, opened for business recently with the promise of undercutting competitors who accept only conventional payments.
The store styles itself after sites like Amazon.com, NewEgg.com, and Rakuten.com (formerly Buy.com). Whereas those retailers do not accept bitcoins, the Bitcoinstore accepts bitcoins as payment exclusively.
Bitcoin is a virtual means of payment that enables people to transact anonymously. Among other things, Bitcoin performs many of the same functions as payment systems such as Visa or PayPal, including allowing users to pay for purchases online.
Unlike those services, however, Bitcoin carries no merchant fee. Bitcoinstore's founders claim this allows them to discount up to 10% from the retail price of items. They also say they hope Bitcoinstore will lure new consumers to the digital currency, which has roughly 500,000 users worldwide, according to one estimate.
“We’re hoping to open up the fold, to aggressively pursue people who haven’t used Bitcoin yet,” says Jon Holmquist, Bitcoinstore’s head of marketing.
Bitcoinstore also features links to online exchanges where consumers can buy bitcoins using a credit card, checking account or PayPal. The retailer stocks its virtual shelves with merchandise from Ingram Micro, the world’s largest wholesaler of computers. Bitcoinstore pays Ingram Micro in dollars, Holmquist says.
Bitcoinstore’s opening follows a beta test of the service in November. Its model follows a similar tactic employed by SCVNGR, the company behind the LevelUp mobile payment system. This week, 20 LevelUp merchants chose to ban credit and debit cards for a day to encourage their customers to use LevelUp instead.
To date, Bitcoinstore has sold roughly $50,000 worth of merchandise, according to Holmquist, who adds the retailer aims to garner $850,000 worth of orders by the end of March. To spur sales, the store plans to offer all merchandise at wholesale prices throughout the month of March.
Holmquist says that he and Bitcoinstore founder Roger Ver, who founded an online store that sells computer memory, would like to see Amazon and other online retailers accept Bitcoin. “That is the goal,” Holmquist says. “We’ve talked with them, we’ve pleaded with them, we’ve begged them, we started this site,” he adds.
Spokespeople for Amazon, NewEgg and Rakuten.com, which was formerly Buy.com, did not comment immediately on whether their sites plan to accept bitcoins. PayPal also did not immediately provide comment.
As Holmquist describes it, consumers and merchants may be ready to use Bitcoin because the tender offers an alternative to fees and chargebacks that Amazon Payments, Stripe, Google Wallet and other upstart services cannot offer. "I think people are just switching providers, but the providers are not solving the problem," Holmquist adds.
Bitcoinstore’s opening follows an announcement recently by Reddit, a social news and entertainment website, that it accepts bitcoins as payment for Reddit Gold, a subscription service. In November, WordPress, the world’s most popular blogging platform, began accepting bitcoins as payment.