Friday, September 7, 2012

Sell Globally with Bitcoin

Companies that build innovative products want to sell their products all over the world.  The internet makes it possible to reach customers around the world, but how can you collect payments from places like Russia, China, India, and other countries that are not supported by the established credit card system?  There are growing middle classes in those countries, and they like to buy western goods, and they like to shop online.  But how can these emerging markets be monetized without massive risk?
The BitForce Single SC from Butterfly Labs

Butterfly Labs (formally BF Labs, Inc.) sells packaged electronics for high-speed data encryption and cryptographic processing, typically used for high-speed number-crunching with very low power consumption.  Their products are used in Medical Research for applications such as gene sequencing, and in Telecommunications for applications such as network penetration testing.  Their products are also used to secure and process transactions on the distributed bitcoin network.

On their website, Butterfly Labs accepts payments with PayPal and Dwolla.  Unfortunately, these payment methods do not work very well outside of a handful of countries.  Dwolla is limited only to customers in the USA, and PayPal is very risky to accept from an untrusted customer, especially overseas.

If a business, any business, were to accept a payment with PayPal, and ship merchandise to a customer, and if that PayPal account happened to be hacked or stolen at the time of purchase, PayPal would forcibly take the payment back from that business.  Payment fraud is a very common problem, because the business suffers a total loss on the value of the merchandise that they shipped.  Credit card fraud, just in the United States, costs businesses $100 Billion per year according to the Forbes and a Lexis Nexus study, and 95% of this fraud occurs in situations where the card is not present or swiped, such as internet payments.

Butterfly Labs began accepting bitcoin payments in April 2012, and started seeing a steady increase in orders from Europe and Asia using bitcoin.  There is virtually zero risk of fraud in accepting a payment in bitcoin, so Butterfly Labs can ship their merchandise with confidence that there will not be a reversal of the payment.

When Butterfly Labs was ready to take pre-orders for their next-generation product, in June 2012, bitcoin was chosen by Butterfly Labs to be the exclusive online payment method for this new product line.

Butterfly used a custom-built shopping cart plugin for WordPress Gravity forms, built by BitPay, which offers an easy-to-configure interface into the BitPay Payment Gateway API.

Nasser Gh Moeini, the CTO at Butterfly Labs says:
“We chose BitPay because our customers want to pay us quickly from all corners of the world, and the BitPay service is the most efficient and lowest-risk way to collect cross-border internet payments.” 
During the first day of the new product release, BitPay shattered the record for Bitcoin payment processing in a single day, handling over $250,000 worth of bitcoin payments in one day.  On that first day, the orders and payments arrived from 17 different countries, including Belgium, Russia, Finland, Poland, and the Phillippines.  

By using Bitcoin, Butterfly Labs is able to accept a payment from any country on the planet, instantly, with no risk of fraud.  They can ship their products with confidence around the world, and monetize all of the emerging markets that are too risky or unavailable with PayPal or the credit card system.

Businesses interested in accepting bitcoin can visit BitPay.com to learn more.