The acceptance of cryptocurrency in the marketplace may get a huge boost from eBay as the online auction giant considers accepting Bitcoin.
There are only a handful of websites that have become a verb, being synonymous with a specific activity. Many people “Google” information, and those looking to sell stuff online “eBay” it. The dominant online auction site, which boasts a market cap of $39.2 billion may make the wish of crypto enthusiasts come true as they are considering accepting Bitcoin as a payment option.
Auction or Buy It Now
In an interview with Yahoo Finance, the senior vice president of eBay Americas, Scott Cutler, said that the online auction site was “seriously considering” accepting the digital currency. However, before everyone starts to celebrate, Cutler went on to add that “we’re not quite there yet.”
This would be a huge development if one of the web’s biggest sales sites would accept Bitcoin. As of now, eBay does not accept any cryptocurrency as a payment option. It currently takes PayPal, credit cards, and debit cards. Making the move to accept Bitcoin would expand eBay’s potential revenue to a pretty large degree as the total market cap for Bitcoin is a cool $284.5 billion, according to Coinmarketcap.
Would Bitcoin Get Good Feedback?
As of now, people can buy and sell cryptocurrency on eBay, along with mining contracts and mining equipment. However, there are some caveats to remember. First is that cryptocurrency is sold via the site’s classified ad system. This means that you can’t partake of the feedback system or the eBay Money Back Guarantee feature.
If you purchase virtual currency from an eBay seller, the reality is that you’re on your own. PayPal and eBay will not refund your money if you’re scammed due to the cryptocurrency being a virtual asset, which means that there’s no tangible proof, such as a post office receipt, of a physical good being shipped and received. This has led to a lot of scams, which just reinforces the old adage of “buyer beware.”
Bitcoin Could Drive Sellers Away
Accepting Bitcoin could be a risk for eBay though. While Overstock saw its value rise after deciding to accept Bitcoin, Steam had to abandon taking the virtual currency due to its wild fluctuations in value.
It’s this volatility that makes Bitcoin an interesting dilemma for eBay. A lot of sellers exist on a very small profit margin as eBay has upped the fees over the years, such as adding a 10% charge on the shipping costs. As someone who has sold on eBay for 18 years, I can say quite a few sellers would be leery of accepting Bitcoin due to the potential of the currency dropping in value, not to mention the costs associated with converting it into fiat currency.
The reality is that eBay itself is sheltered from such up-or-down fluctuations as they invoice the sellers in cold, hard cash. If eBay forces sellers to accept Bitcoin, and the price suddenly drops 20%, eBay isn’t hurt at all as they’re still charging the seller the same fee amount they did before. By contrast, the seller just lost 20% of their sale, not to mention the added insult of having to pay fees on the higher value amount. A modest profit could turn into a loss in the blink of an eye. Plus, the costs of converting the cryptocurrency would be way too high for the standard small amounts that most items on the auction site go for.
In the end, eBay could increase their revenue by accepting Bitcoin, but the problem is ensuring that the sellers, on whom eBay depends, don’t take a bath in the process. Currently, there’s no quick and easy solution, but we’ll see what eBay comes up with.
Do you think eBay will eventually start accepting Bitcoin? What would be the best way to implement such a policy? Let us know in the comments below.
Images courtesy of Pixabay and Bitcoinist archives.