The CEO of Binance, Changpeng “CZ” Zhao, is a talkative fellow and never one to shy away from expressing his opinions quite publicly. In a recent tweet, CZ expressed his consternation that more major retailers on the Internet have not begun to accept cryptocurrencies for online payments.
In his tweet, CZ explained:
For any internet (non-physical) based business, I don’t understand why anyone would not accept crypto for payments. It is easier, faster and cheaper to integration than traditional payment gateways. Less paperwork. And reaches more diverse demographic and geography.
According to a related report:
There are currently around 11 major online retailers accepting Bitcoin, including Microsoft who started excepting digital gold for Xbox purchases back in 2014. Similarly Overstock – a company which sells anything from electronics to health and beauty items- accepts several cryptocurrencies including Bitcoin, Ethereum, Litecoin, Dash, and Monero.
CZ’s quandary is very reminiscent of the early days of plastic credit card acceptance at major retail establishments. Major retailers in those days had proprietary credit systems that gave them a personal connection with their customers and a communication channel for marketing various sales campaigns. Loyalty and convenience were valued, but the greater convenience and lower operating costs of national credit card systems eventually won the day, but only after quite a few years of constant negotiation.
Crypto payment acceptance may be running into a modern day version of this reluctance to open proprietary floodgates. In the older example, a few key stores attempted to distinguish themselves from the pack by accepting the newest payment vehicle in town, and soon the rest of the industry followed suit on competitive grounds alone. One responder to CZ’s tweet suggested a similar breakthrough could happen now, if only CZ would contact Jeff Bezos at Amazon and urge that if Amazon “jumped on the bandwagon, other retailers would follow”. CZ’s response:
Amazon will have to issue a currency sooner or later.
Online conversions can happen very quickly, much more so than widespread “brick-and-mortar” retail acceptance. The latter has equipment enhancement issues that can be very costly. A simple online interface is all that is required for online conversions, but there is one more “hurdle”, so to speak. Online retailers typically ship a few days later than the order to ensure that the item is in stock. Debiting the payment card occurs after shipment. A few days delay in the crypto world, due to volatility in the price behaviors of digital tokens, could create “payment risk” that could be material, an obstacle that would have to be addressed in some way.
Amazon has been very closed mouthed about having any crypto related projects in the background, although there have been passive attempts at employing blockchain techniques in its operations. The crypto community has speculated that Amazon will soon do something material, if only because Facebook has been quite vocal about its launch of an internal blockchain development unit.
In all likelihood, the ideal solution would involve Amazon issuing its own a stablecoin, a concept that Amazon developers may have already embraced, if not now, then for sure, per CZ, “sooner or later”.