Since
its inception in 2009, Bitcoin has been labeled the “mysterious coin service”
and has recently become synonymous with criminals and currency speculators. Its
lack of regulation gives it a lot of potential but its volatility and freedom
mean that it is also very easy to get burned. So why is a multi-billion dollar
company like Apple venturing so close to the fire?
Apple
announced recently that it has raised the possibility of using its signature
iPhones and iPads to perform transactions using Bitcoin. Until now, Apple was
very peculiar with its company policies, usually rejecting apps that enabled
cryptocurrency transactions. However an amended clause in their new App Store
review guideline states that “apps may facilitate transmission of approved
virtual currencies provided that they do so in compliance with all state and
federal laws for the territories in which the app functions.” Previously, Apple
had a reputation for rejecting third party applications that enabled Bitcoin
transactions, generally citing rules that banned developers from issuing apps
that would be complicit to law breakers. It seems rather odd that Apple is now
considering authorizing payments through a service facing so many preliminary
challenges. Personal risk, slow transaction speeds and no credit options have
almost become attached baggage with Bitcoin. So why risk it?
I
think that Apple has become charmed with the potential that Bitcoin has to offer.
It is a charm so alluring that the preliminary challenges facing the service
become minute. One of the most desirable features of the service is its low
transaction fees. Clearly, fees matter to consumers. Visa, for example, charges
an estimated 1.5% of the cost of the item plus a network interchange fee. For
every $100 the merchant sells on credit, nearly $2 goes to Visa. Bitcoin can
cut this to 1% of the item’s price. Bitcoin is also a great substitute for the
consumers. Customers using the service are protected from the risk of having
their identifiable information compromised and stolen, which is certainly the
case with modern credit or debit cards. Then there is a convenience factor for
consumers. Bitcoin alleviates the necessities of constantly having to type in a
16-digit credit card number plus a security code every time you make a
purchase. With Bitcoins, there is no need to remember irrelevant information.
It all boils down to the customer experience. Apple is renowned for its
marketing and customer service skills. It realizes that there is a better way
to make the shopping experience more comfortable for the consumer and is now
actively seeking a safe and intuitive method to implement this service.
Greater
acceptance of Bitcoin is evident in the array of companies now using its
service. Major vendors such as Virgin Galactic, Chicago Sun-Times, WordPress,
OKCupid and Tesla illustrate the potential that exists for this virtual
currency. I think Apple is just the newest member to join the club.
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