merchant adoption manual
TRANSCRIPT
[INSERT TITLE HERE]
Prepared for
[INSERT TARGET MERCHANT’S NAME HERE]
Prepared by [Your Name or Company Name] [Insert relevant postnomials and/or your business number here]
[Insert Date Here]
[INSERT TARGET MERCHANT’S LOGO HERE]
Executive Summary
[Tailor this introductory paragraph specifically to your target merchant. Some good points to mention
are:
• Merchant’s revenue and profit margin (if you can easily find this data)
• How fee savings can greatly amplify profit margin (e.g. If a merchant’s profit margin is 5%,
adding a saving of 1% of fees to this figure increase profit margin by 1/5, or 20%!)]
In addition to reducing costs, accepting Bitcoin as a method of payment opens the door to completely
new revenue streams, as Bitcoin allows your customers to pay for things online and in person without
needing to have a credit card or local currency, which are usually subject to high international
transaction and foreign exchange fees. You can now capture this large market segment of people who
can’t get access to credit cards, or who simply do not want to use their credit cards online.
Furthermore, as part of this service offering, [insert merchant name here] will receive free publicity in
local and international Bitcoin publications, which have readership in the hundreds of thousands of
people on a daily basis.
Best of all, there are zero up-front costs, monthly fees, equipment fees, or account closure fees. The
most [INSERT MERCHANT NAME HERE] will ever pay is a flat 1% fee for processing transactions, with
fees as low as 0.5% depending on your transaction volumes.
I look forward to forming a healthy and prosperous long-term business relationship with [INSERT
MERCHANT NAME HERE], and I look forward to assisting you implement Bitcoin as an additional
method of payment for your business.
Sincerely,
[Your name] [Relevant postnomials]
E: [your e-mail address] T: [your contact number]
[INSERT MERCHANT NAME HERE] COMMERCIAL-IN-CONFIDENCE June 2014
[your name here]
Table of Contents Introduction ....................................................................................................................................................... 1
Free Service Offering ..................................................................................................................................... 1
About Me ....................................................................................................................................................... 1
What is Bitcoin? ................................................................................................................................................. 2
A Brief History ................................................................................................................................................ 2
Bitcoin is a Payment System .......................................................................................................................... 3
Bitcoin is Digital Gold ..................................................................................................................................... 3
Bitcoin is Digital Cash ..................................................................................................................................... 3
Bitcoin vs. Gold vs. Cash ................................................................................................................................ 4
How and where can I accept Bitcoin? ............................................................................................................... 5
At Point of Sale .............................................................................................................................................. 5
Online ............................................................................................................................................................ 5
Why do Merchants Love Bitcoin? ...................................................................................................................... 6
0% risk for a maximum 1% fee ...................................................................................................................... 6
Quick & free to set up, quick & free to shut down ........................................................................................ 6
Protection from Fraud and Chargebacks ....................................................................................................... 6
Keep Up With, and Stay Ahead of, Your Peers and Competitors .................................................................. 7
Offering Customers Another Way to Pay is Always Good for Sales .............................................................. 7
Lower Fees ..................................................................................................................................................... 8
Increases Local & International Marketing Exposure .................................................................................. 11
Why do Customers Love Bitcoin? .................................................................................................................... 12
Banking for the Unbanked ........................................................................................................................... 12
Security & Fraud Protection ........................................................................................................................ 12
Discretion & Privacy .................................................................................................................................... 13
Lower Fees ................................................................................................................................................... 13
Global Mobility & Convenience ................................................................................................................... 13
Investment Potential ................................................................................................................................... 14
Sample Press Release – Coindesk.com ............................................................................................................ 15
Conclusion & Recommendations .................................................................................................................... 16
References ....................................................................................................................................................... 17
[INSERT MERCHANT NAME HERE] COMMERCIAL-IN-CONFIDENCE June 2014
[your name here] 1
Introduction
Free Service Offering
The free services being offered to [INSERT MERCHANT NAME HERE] are as follows:
• Provide a technical and commercial Bitcoin presentation and report to [INSERT MERCHANT NAME
HERE] management
• Assist [INSERT MERCHANT NAME HERE] in implementation of Bitcoin as a method of payment at
physical locations and online
• Promotion of [INSERT MERCHANT NAME HERE] on social and news media, including
o Promotion on Reddit.com’s Bitcoin site (120,000 subscribers)
o Promotion on Coindesk.com (275,000 daily visitors) (μStat, 2014)
o Listing on global Bitcoin directory, Coinmap.org
About Me
[A small paragraph here about who you are, and why a merchant should trust you to help them with this
Bitcoin implementation. This could include your professional background, academic background, extra-
curricular background, or anything relevant to your target merchant]
Academic Qualifications
• [Insert relevant qualifications here]
Professional Memberships, Qualifications & Licences
• [Insert relevant memberships, qualifications and licences here]
[INSERT MERCHANT NAME HERE] COMMERCIAL-IN-CONFIDENCE June 2014
[your name here] 2
What is Bitcoin?
A Brief History
Bitcoin is an economic technology and digital currency that was invented in November 2008 (Nakamoto,
2008) as a response to the crisis that crippled the international financial and credit markets earlier that year.
As Bitcoin continues to grow and be accepted as a method of payment and global digital currency, the
impacts of future financial crashes can be reduced, or even eliminated altogether.
With the invention of Bitcoin, merchants now have the option of increasing their profits, reducing their costs
and risks, and reaching new local and international markets – all with the click of a few buttons. Several
Bitcoin investors and visionaries have also become very wealthy, after witnessing the value of one Bitcoin
rise from less than 5 cents in July 2010 to over $660 in June 2014 – an astronomical rise of over 13,000 times
over 4 years. Its increase in value from June 2013 to June 2014 is an impressive increase of 8 times from
about $80 per coin to over $660.
Bitcoin has sometimes been referred to as “Magic Internet Money” due to its technical complexity and
difficult-to-understand nature. The following sections of this proposal provide a more complete picture of
the breadth, power and robustness of Bitcoin as a technology and payment network.
Figure 1 - Bitcoin Price History – Bitstamp Exchange (Bitcoin Charts, 2014)
[INSERT MERCHANT NAME HERE] COMMERCIAL-IN-CONFIDENCE June 2014
[your name here] 3
Bitcoin is a Payment System
First and foremost, Bitcoin is an open-source online international payment system that is not controlled by
any central authorities. It is powered by a voluntary international network of people called “miners”, who
are rewarded with Bitcoin for processing transactions. Transactions are processed by solving highly
complicated algorithms based on military-grade security and encryption using either standard home and
office PCs or highly specialised computer equipment with much more processing power. Due to the
distributed digital nature of the network as well as the level of security that the Bitcoin network affords to
its participants, it is impossible to counterfeit or destroy Bitcoins, and transactions to and from anywhere on
the planet are effectively instant. All you need is an internet connected device to transact on this network.
Bitcoin is Digital Gold
As well as being a payment technology and network, each Bitcoin, which is currently divisible into 100 million
smaller parts, has value based on its scarce and indestructible nature, and obvious utility to merchants and
their customers. Just like gold, Bitcoins are mined, and over time they become increasingly difficult to mine
as scarcity and competition increase, and they eventually run out. There have been about 13 million Bitcoins
mined to date, and there will only ever be 21 million of them mined. Mining supply is perfectly predictable
thanks to Bitcoin’s protocol, with mining output halving every 4 years, eventually reaching zero. Bitcoins will
be mined until the year 2140, however, over 95% of all Bitcoins will have been mined during the next two
decades.
Bitcoin is Digital Cash
In additional to being similar to gold, Bitcoin is also very similar to cash in several ways, but highly superior
to it. Several customers and merchants love cash because of the speed and anonymity it provides over
electronic payments. Bitcoin is identical in anonymity to cash in that, even though every single cash note has
a serial number on it, it is very difficult to trace a serial number or marked bill back to an individual. With that
said, authorities may still be able to track down bank robbers or money launderers if bills are marked.
Similarly, if a Bitcoin heist were to occur, a competent team of detectives may be able to trace and track
down a thief. For all other intents and purposes, Bitcoins are as anonymous a way to pay for things both
online and at physical points of sale as cash is. If “Cash is King”, then Bitcoin is the Emperor!
[INSERT MERCHANT NAME HERE] COMMERCIAL-IN-CONFIDENCE June 2014
[your name here] 4
Bitcoin vs. Gold vs. Cash
The below table serves as a great summary of Bitcoin’s superiority over gold and other international
currencies.
Bitcoin Gold Cash
Counterfeit-Proof Yes No No
Easy to carry around Yes No Notes – Yes (to an extent)
Coins - No
Instantly internationally transferrable & spendable
Yes No No
Increases in value over time
Yes Yes No
Easily divisible Yes – divisible to 100
million parts
Somewhat – can be physically split into ounces and grams
Yes – divisible into 100 cents
Accepted as payment by merchants
Yes No Yes
Can be used as an investment
Yes Yes No
Subject to control by centralised authorities
No Yes Yes
Subject to high fees No Yes Yes
Can be created out of thin air
No No Yes
Can be accepted online without an intermediary
Yes No No
Can be stolen from you if you aren’t careful
Yes – but becoming more difficult as the technology
matures Yes Yes
Can be destroyed No No Yes
Has a low environmental & social impact
Yes No No
Has other non-monetary applications
Yes Yes No
[INSERT MERCHANT NAME HERE] COMMERCIAL-IN-CONFIDENCE June 2014
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How and where can I accept Bitcoin? You can accept Bitcoin anywhere you have an internet connection, and on any website.
At Point of Sale
Accepting Bitcoin at a physical point of sale is a very simple two-step process. A typical Bitcoin POS system
is shown below.
Step 1 Log in to your merchant account on any internet connected device (PC, Mac, Tablet or Smart Phone), enter the sale amount in Australian Dollars, and click “Pay”. Each merchant account can have an unlimited amount of users assigned to it, so additional “POS terminals” can be rolled out free and instantly to any other internet connected device.
Step 2 Once you click “Pay”, a unique QR code is generated, which your customer then scans with their phone. Once scanned, they payment is complete, and payments are confirmed within a few seconds. Once payment is confirmed, the Bitcoins are instantly converted to Australian Dollars for a flat fee, and put into your nominated bank account the next day. It’s that easy!
Online
Bitcoin payments can be integrated easily and stylishly into any website or e-commerce platform, and can be customised to look however the merchant needs or desires. Similar to the Point-of-Sales system, QR codes and invoice numbers are generated for your online sales.
[INSERT MERCHANT NAME HERE] COMMERCIAL-IN-CONFIDENCE June 2014
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Why do Merchants Love Bitcoin? There are several reasons why merchants love Bitcoin, but the main reason they love it is because it
increases their profitability and revenue, and reduces their costs and risks. Details on how Bitcoin achieves
all this are provided below.
0% risk for a maximum 1% fee
At the current stage of Bitcoin’s technological life, the day-to-day price of Bitcoin can be more volatile than
a merchant is willing to accept. Thankfully, there are several local Bitcoin payment processors who are able
to instantly exchange your Bitcoins into Australian dollars at the moment of sale for a small fee of 1%, or as
low as 0.5% depending on your monthly transaction volumes. The money is deposited in your bank account
the next day. I have strong connections with several local payment processors, and will be able to get you set
up quickly and at no cost.
If a merchant decides to settle in Bitcoin, the fee is 0%, however, a merchant will be subject to the short-
term price volatility of Bitcoin in that situation.
Quick & free to set up, quick & free to shut down
Once the decision to accept Bitcoin has been made by a merchant, set-up time is about as quick as opening
up a bank account, and all you need is an internet connected device like a PC, laptop, tablet or smartphone
to start accepting Bitcoin. There are no establishment fees, equipment fees, monthly fees, or transaction
minimums. All you need is an internet connect device, and the payment processor will take care of the rest
for a maximum of a 1% fee.
Although it costs you nothing to set up and make Bitcoin payment available to your customers, if you ever
want to stop accepting Bitcoin for some reason, all you have to do is stop accepting it – there is no need to
call anyone to cancel any plans, or pay service cancellation fees of any sort.
Protection from Fraud and Chargebacks
Credit card fraud costs the Australian economy billions of dollars annually, and the global economy a
staggering $190 billion per year (LexisNexis, 2013). A high proportion of this fraud is related to the use of
credit and debit cards. Every day, merchants are at risk of being paid with a fraudulent or stolen credit card,
and have to go through the slow, expensive and painstaking process of processing chargebacks.
Bitcoins are single use only, cannot be counterfeited, and cannot be charged back. Once the transaction is
processed, the money is in the merchant’s bank the next day. Guaranteed.
[INSERT MERCHANT NAME HERE] COMMERCIAL-IN-CONFIDENCE June 2014
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Leading international research firm LexisNexis estimates that merchants lose 0.51% of their revenue to online
fraud each year (LexisNexis, 2013). CyberSource, a unit of Visa Inc. and one of the largest international
providers of payment processing and risk management services, estimates the yearly loss to be 0.9%
(CyberSource, 2013). Although these figures appear quite small, when added to your bottom line, they result
in a significant increase to your profit margin.
Keep Up With, and Stay Ahead of, Your Peers and Competitors
Due to the obvious advantages Bitcoin brings to customers, several of your industry peers and competitors
have begun to accept Bitcoin as a method of payment. A few examples are listed below.
Example Peer/Competitor 1
Example Peer/Competitor 2
Example Peer/Competitor 3
Example Peer/Competitor 4
Offering Customers another Way to Pay is Always Good for Sales
In the early days of credit cards, businesses who didn’t offer the customers a means of paying by card lost
lots of potential business. The benefits of accepting credit cards back then were (Burke, 2005):
• Make it more convenient for
you customers to pay you
• Generally increase sales
• Increases credibility
• Impulse purchases go up
• Increases average sales
order
Accepting Bitcoin provides merchants with all of the above benefits, but without the high fees, and fraud
and chargeback risks.
It’s the Most Environmentally Sustainable Payment System
Comparing Bitcoin to our other forms of physical money like gold, notes and coins, Bitcoin is the clear winner.
Over 4 billion tonnes of rock need to be soaked in 810 litres of water with 400,000 tonnes of toxic cyanide in
it to extract the 2700 tonnes of gold we mine every year. Not to mention the quarter-of-a-million tonnes of
metal needed for coins, and the thousands of tonnes of cotton and linen. Bitcoin only uses electricity, and
only a little bit of it at that. The energy consumption and carbon emissions of the three types of money are
shown on the table below (McCook, 2014):
[INSERT MERCHANT NAME HERE] COMMERCIAL-IN-CONFIDENCE June 2014
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The Relative Sustainability of Money
Energy Used (GJ) Tonnes CO2 Produced
Gold Mining & Recycling 500 million 58 million
Paper Currency & Minting 39.6 million 6.7 million
Bitcoin Mining 3.3 million 0.55 million
Lower Fees
Bitcoin vs. EFTPOS
The below table shows a comparison of typical fees paid for EFTPOS debit and credit card services, including
one EFTPOS terminal (Commonwealth Bank of Australia, 2014) compared with Bitcoin, for different monthly
transaction volumes.
Physical Mobile EFTPOS & EFTPOS Transactions
Monthly Volume
Yearly Volume
Fixed Monthly
Fee
Bank Fee Rate (%)
Avg. Chargeback/ Fraud Rate
(%)
Bitcoin Comparison
Rate (%)
Yearly Savings
Addition to Profit Margin
(%)
$1,000 $12,000 $60 6.00% 0.90% 1.00% $708 5.90%
$2,000 $24,000 $60 3.00% 0.90% 1.00% $696 2.90%
$3,000 $36,000 $60 2.00% 0.90% 1.00% $684 1.90%
$6,000 $72,000 $90 1.50% 0.90% 1.00% $1,008 1.40%
$9,000 $108,000 $120 1.33% 0.90% 1.00% $1,332 1.23%
$12,000 $144,000 $150 1.25% 0.90% 1.00% $1,656 1.15%
$15,000 $180,000 $180 1.20% 0.90% 1.00% $1,980 1.10%
$30,000 $360,000 $330 1.10% 0.90% 1.00% $3,600 1.00%
$60,000 $720,000 $630 1.05% 0.90% 0.95% $7,200 1.00%
$100,000 $1,200,000 $1,000 1.00% 0.90% 0.90% $12,000 1.00%
$500,000 $6,000,000 $5,000 1.00% 0.90% 0.75% $69,000 1.15%
$1,000,000 $12,000,000 $10,000 1.00% 0.90% 0.50% $168,000 1.40%
Other Fees
In addition to the above fees, merchants are liable for a monthly fee of $15 for every additional EFTPOS
terminal they require. There are no equipment fees in the world of Bitcoin.
[INSERT MERCHANT NAME HERE] COMMERCIAL-IN-CONFIDENCE June 2014
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Bitcoin vs. Online Credit Card Payments
The below table shows a comparison of typical fees paid to an online credit card payment processor
(Commonwealth Bank of Australia, 2014) compared with Bitcoin, for a monthly transaction volume of over
$1,000,000. [If your target merchant has a lower monthly transaction volume, use the fee rates found in
the accompanying spreadsheet]
Online Payments Processing - via Bank Monthly Transaction
Volume Over
$1,000,000
Transaction Size
Per Transaction
% Fee
Per Transaction
Fixed Fee
Monthly Fixed Fee
Avg. Chargeback/ Fraud Rate
(%)
Total Fees (%)
Bitcoin Comparison
Rate (%)
Savings Per Transaction
($)
Savings Per Transaction
(%)
$1 1.40% $0.29 $10 0.90% 31.30% 0.50% $0.31 30.80%
$2 1.40% $0.29 $10 0.90% 16.80% 0.50% $0.33 16.30%
$5 1.40% $0.29 $10 0.90% 8.10% 0.50% $0.38 7.60%
$10 1.40% $0.29 $10 0.90% 5.20% 0.50% $0.47 4.70%
$25 1.40% $0.29 $10 0.90% 3.46% 0.50% $0.74 2.96%
$50 1.40% $0.29 $10 0.90% 2.88% 0.50% $1.19 2.38%
$100 1.40% $0.29 $10 0.90% 2.59% 0.50% $2.09 2.09%
$500 1.40% $0.29 $10 0.90% 2.36% 0.50% $9.29 1.86%
$1,000 1.40% $0.29 $10 0.90% 2.33% 0.50% $18.29 1.83%
Other Fees
In addition to the above fees, merchants are liable to a $30 fee for every chargeback, as well as a $110 service
cancellation fee. These fees do not exist in the world of Bitcoin.
Bitcoin vs. PayPal
The below two tables show a comparison of typical fees paid to PayPal (PayPal, 2014) compared with Bitcoin,
for a monthly transaction volume of over $150,000. Fees are substantially higher for lower monthly
transaction volumes. As can be seen from the tables, payments from international customers are subject to
higher fees for merchants, and customers also typically have to pay a 2.5% foreign currency exchange fee if
making international purchases. There are no foreign exchange fees in the world of Bitcoin.
[INSERT MERCHANT NAME HERE] COMMERCIAL-IN-CONFIDENCE June 2014
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Local Customers
Online Payments Processing - via PayPal (Local Customers) Monthly Transaction
Volume Over
$1,000,000
Transaction Size
Per Transaction %
Fee
Per Transaction
Fixed Fee
Avg. Chargeback/ Fraud Rate
(%)
Total Fees (%)
Bitcoin Comparison
Rate (%)
Savings Per Transactio
n ($)
Savings Per Transaction
(%)
$1 1.10% $0.30 0.90% 32.00% 0.50% $0.32 31.50%
$2 1.10% $0.30 0.90% 17.00% 0.50% $0.33 16.50%
$5 1.10% $0.30 0.90% 8.00% 0.50% $0.38 7.50%
$10 1.10% $0.30 0.90% 5.00% 0.50% $0.45 4.50%
$25 1.10% $0.30 0.90% 3.20% 0.50% $0.68 2.70%
$50 1.10% $0.30 0.90% 2.60% 0.50% $1.05 2.10%
$100 1.10% $0.30 0.90% 2.30% 0.50% $1.80 1.80%
$500 1.10% $0.30 0.90% 2.06% 0.50% $7.80 1.56%
$1,000 1.10% $0.30 0.90% 2.03% 0.50% $15.30 1.53%
International Customers
Online Payments Processing - via PayPal (International Customers) Monthly Transaction
Volume Over
$1,000,000
Transaction Size
Per Transaction %
Fee
Per Transaction
Fixed Fee
Avg. Chargeback/ Fraud Rate
(%)
Total Fees (%)
Bitcoin Comparison
Rate (%)
Savings Per Transaction
($)
Savings Per Transaction
(%)
$1 2.10% $0.30 0.90% 33.00% 0.50% $0.33 32.50%
$2 2.10% $0.30 0.90% 18.00% 0.50% $0.35 17.50%
$5 2.10% $0.30 0.90% 9.00% 0.50% $0.43 8.50%
$10 2.10% $0.30 0.90% 6.00% 0.50% $0.55 5.50%
$25 2.10% $0.30 0.90% 4.20% 0.50% $0.93 3.70%
$50 2.10% $0.30 0.90% 3.60% 0.50% $1.55 3.10%
$100 2.10% $0.30 0.90% 3.30% 0.50% $2.80 2.80%
$500 2.10% $0.30 0.90% 3.06% 0.50% $12.80 2.56%
$1,000 2.10% $0.30 0.90% 3.03% 0.50% $25.30 2.53%
Other Fees
In addition to the above fees, merchants are liable for a $15 fee for every chargeback. There are no
chargebacks in the world of Bitcoin.
[INSERT MERCHANT NAME HERE] COMMERCIAL-IN-CONFIDENCE June 2014
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Increases Local & International Marketing Exposure
The Bitcoin community is a vibrant, eclectic and rapidly growing one. To date, several million people have
opened Bitcoin accounts locally and internationally. Coinbase, the USA’s leading Bitcoin provider, witnessed
growth from 13,000 users in 2013, to 1.3 million users in June 2014 – a yearly growth rate of 10,000%!
(Coinbase, 2014). Blockchain.info has seen 1.6 million users create accounts since their founding in early
2012, with 1.3 million of those accounts coming online in the past year (Blockchain.info, 2014). Due to
Bitcoin’s popularity means that there is a thriving ecosystem underpinning it, with the most popular Bitcoin
news sites receiving monthly website hits in the tens of millions. As a merchant who accepts Bitcoin, you will
be embraced by the community, and receive free exposure through press releases, tweets, and blog posts.
Further to the above, when you become a Bitcoin merchant, simply adding “Bitcoin” to your website’s Search
Engine Optimisation (SEO) will increase your exposure through search engines, especially if you are one of
the early movers in your industry. Try it yourself – just Google “Bitcoin [Insert business / product / service
type here]” and take a look.
[INSERT MERCHANT NAME HERE] COMMERCIAL-IN-CONFIDENCE June 2014
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Why do Customers Love Bitcoin?
Banking for the Unbanked
While credit cards are quite common in Australia and other rich countries, credit cards, or even bank
accounts, are simply not very common at all for a huge chunk of the human population. A study undertaken
by leading research institute Gallup, shown below, shows the extent of problem (Gallup, 2012).
Credit Card Ownership, by Region (Geographical regions include developing economies only)
Region % who have a credit card
High-income Economies 50%
Latin America & the Caribbean 18%
Europe & Central Asia 16%
East Asia and Pacific 7%
Sub-Saharan Africa 3%
Middle East & North Africa 2%
South Asia 2%
Many of these people would love to participate in the online economy, but until Bitcoin was invented, had
very limited options. The minimum that is required is the most primitive of 2G or GPRS internet
connections and a $10 “dumb-phone”, and Bitcoins can be transmitted from one person to another.
Security & Fraud Protection
The internet can be a scary place, and not all consumers feel comfortable with handing over their credit card
information to merchants they don’t know. With that said, even the most trusted of sellers and the largest
of online merchants are not safe from hackers breaking into their customer databases and stealing customer
credit card information. Six of the biggest-ever credit card hacks are shown below (CNN Money, 2013):
Merchant Number of Credit Card Details Obtained by Hackers
Adobe Systems 150 Million
Heartland Payment Systems 130 Million
TJ Maxx 94 Million
Sears 90 Million
Sony 77 Million
Target 50 Million
The risk of theft of personal financial information simply doesn’t exist in the world of Bitcoin. Once you pay,
your Bitcoin is spent and no information can be reused by malicious parties.
[INSERT MERCHANT NAME HERE] COMMERCIAL-IN-CONFIDENCE June 2014
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Discretion & Privacy
Several people today are concerned with their online privacy for one reason or another. Typically, when you
purchase something with your credit card, details of your payments and who you paid money to are
permanently recorded on your bank statements. Whilst this is OK for most consumers, several consumers do
not like leaving an electronic paper trail which catalogues their movements and expenditures.
Because of Bitcoin’s cash-like nature, there is no easily identifiable electronic paper-trail left behind after a
transaction is made, giving consumers the privacy and discretion they yearn for.
Lower Fees
Not only do merchants pay high fees for accepting online and point-of-sale payments, customers also face
several local and international fees as part of the legacy banking and credit card systems. Several banks
charge monthly account keeping fees, and most credit cards charge an annual subscription fee. On top of
this, international travellers are liable for expensive international transaction and foreign exchange fees
every time they make a purchase whilst outside of their home country.
All of these fees are avoided when paying in Bitcoin.
Global Mobility & Convenience
One of the least convenient things for international travellers is the hassle, cost and risk of currency
conversion. Whilst most cities in the world are well regulated and safe places, several aren’t, and travellers
face the risk of dishonest foreign exchange merchants, as well as the additional risk of carrying large
amounts of cash in potentially unsafe places.
Bitcoins are held on a mobile phone, and so long as the phone and Bitcoin wallet are locked with a PIN and
password, you are safe from theft. If your phone happens to be stolen during your travels, your Bitcoins can
be easily restored to any other device after being backed up.
In addition to this, several poor countries face exorbitant fees of over 20% when remitting money from their
country of work back home to their country of origin. Typical remittance costs for a $200 and $500 transfer
are shown in the tables below. As can be seen, in the best case, fees are 1.2% and 1.73% respectively, but in
the worst case, they are 21.06% and 13.44% respectively (World Bank, 2014). The global average cost of a
remittance is 8.36% of the amount sent (World Bank, 2014).
These fees do not exist in the world of Bitcoin.
[INSERT MERCHANT NAME HERE] COMMERCIAL-IN-CONFIDENCE June 2014
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Fee % for a Remittance of USD$200
5 Most Costly Corridors ($USD) Average Cost
5 Least Costly Corridors ($USD) Average Cost
South Africa > Zambia 21.06% Saudi Arabic > Pakistan 1.73%
South Africa > Botswana 20.18% Singapore > Thailand 2.05%
South Africa > Mozambique 19.81% UAE > India 2.68%
South Africa > Zimbabwe 19.55% UAE > Sri Lanka 2.87%
South Africa > Malawi 19.51% Singapore > Bangladesh 3.03%
Fee % for a Remittance of USD$500
5 Most Costly Corridors ($USD) Average Cost
5 Least Costly Corridors ($USD) Average Cost
South Africa > Malawi 13.44% Saudi Arabic > Pakistan 1.20%
South Africa > Zambia 13.36% UAE > India 1.46%
South Africa > Botswana 12.69% UAE > Sri Lanka 1.48%
South Africa > Mozambique 12.27% UAE > Philippines 1.65%
South Africa > Zimbabwe 11.23% USA > India 1.71%
Investment Potential
While Bitcoin is sometimes unfairly panned in the media for being too volatile and causing damaging losses
to investors, the statistics and numbers speak for themselves. The below two tables shows performance of
Bitcoin as an asset class for the 2014 year to date, the past month, 3 months, year, and 3 years (Bitcoin Charts,
2014) in comparison with the ASX200 (Reuters, 2014). As can be seen in the table, Bitcoin has consistently
outperformed the Australian Stock Market significantly over the past 3 years. Volatility has meant that Year-
to-date performance has been weaker than the stock market, however, over longer investment periods,
Bitcoin has always proven to be a superior asset. Returns are based on a closing Bitcoin Price of USD$661.22
on June 1, 2014.
Investment Period Bitcoin Return ASX200 Return
1 Month (May 1, 2014) +44.2% +2.0%
3 Months (March 1, 2014) +18.8% +3.1%
1 Year (June 1, 2013) +416.0% +12.6%
3 Years (June 1, 2011) +7079.4% +18.9%
Year-To-Date (Jan 1, 2014) -11.3% +5.0%
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Sample Press Release – Coindesk.com
[INSERT MERCHANT NAME HERE] Becomes First [insert business type here] To Accept Bitcoin!
[Write a few paragraphs about the merchant – there are several great examples on Coindesk.com. A good
estimate of article length is 1 page in MS Word at 1.5 spacing]
[INSERT MERCHANT NAME HERE] COMMERCIAL-IN-CONFIDENCE June 2014
[your name here] 16
Conclusion & Recommendations
There are no disadvantages, costs or risks involved accepting Bitcoin as a method of payment, and there are
significant upsides in the way of marketing exposure and cost and risk reduction. You can be up and running
in a matter of days in partnership with a fully licenced, regulated and trustworthy payment processing
provider. Once you are set up, marketing can commence immediately, all at a cost to you of $0.
It is also recommended that you use this as an opportunity to reach out to your existing customers, and
demonstrate your commitment to giving your customers more options and services, as well as your
leadership in the digital age.
If you would like more information, or would like to immediately start accepting Bitcoin, please do not
hesitate to get in touch with me for a hassle and fee free implementation.
Sincerely,
[Your name here] [Relevant postnomials]
E: [your e-mail address] T: [your contact number]
[INSERT MERCHANT NAME HERE] COMMERCIAL-IN-CONFIDENCE June 2014
[your name here] 17
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Reuters, 2014. ASX 200 Performance Data. [Online]
Available at: http://www.reuters.com/finance/stocks/chart?symbol=STW.AX
[Accessed 2 June 2014].
[INSERT MERCHANT NAME HERE] COMMERCIAL-IN-CONFIDENCE June 2014
[your name here] 18
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Available at: https://remittanceprices.worldbank.org/sites/default/files/RPW_Report_Mar2014.pdf
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