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In the past year, Bitcoin has come into popular awareness, but limited retailer acceptance of the cryptocurrency continues to prevent consumer use from hitting critical mass. By accepting digital gift cards purchased with cryptocurrencies, grocery stores could be the industry that leads the charge by familiarizing consumers with using digital currencies for everyday goods.
Bitcoin has also struggled with a chicken-and-egg dilemma: While customers are reluctant to begin using it until widespread support is available, grocers have been similarly hesitant to invest in payment solutions that have minimal customer demand.
Navigating an Unfamiliar Payment Playing Field
Costs associated with supporting and securing alternative payments remain large obstacles to Bitcoin adoption in the retail space. The imminent transition from swipe-and-sign to EMV (chip-and-PIN) credit cards, along with the emergence of various mobile payment solutions, put additional pressure on grocers to invest in a plethora of new point-of-sale systems. Due to razor-thin profit margins and the uncertain longevity of these payment methods, businesses have relegated many of these purchasing decisions to the back burner.
This is where digital gift cards emerge as a stepping stone in the new payment landscape. Both grocers and consumers are highly familiar with the digital gift card, and the technology to accept them is already in place. Whole Foods Market and CVS/pharmacy, for example, make their digital gift cards available for payment with cryptocurrencies through third parties. These third parties manage the currency conversion process, dramatically simplifying the Bitcoin processing for the grocers so that they never even touch the Bitcoin.
Digital gift cards can also be stored by consumers on their mobile devices and presented for in-store use at the grocery store. This enables mobile payments without the need for grocers to invest in new, still unproven technology like near field communication (NFC). As such, digital gift cards may be able to drive widespread support for both cryptocurrency and mobile payments.