Overstock.com is one of the biggest names in the US when it comes to e-commerce and online retail. The company has been foraying into cryptos for quite some time now - and in a bold new statement, Overstock board member Jonathan Johnson has now commented that the company sees cryptocurrencies as a better payment option for merchants than compared to credit cards.
As per Johnson, one of the biggest problems with credit card payments is the amount of resources that are required by the company to keep this payment method functioning smooth. The centralized nature of credit cards and their buyer protection services let buyers ask for refunds via third-party services. This leads to many fraudulent cases at times. Johnson revealed that there’s a 40-member team working at overstock’s fraud department to control these kinds of chargeback-frauds.
Moreover, payment errors on credit cards can create legal issues where a long chain is involved ranging from the company to the credit card issuer to the third party and ultimately the user. A lot of resources go into this framework and credit cards are quite a hassle when compared to cryptocurrency payments.
Accepting cryptocurrencies such as Bitcoin and Ethereum is easier for Overstock, as well as cheaper. Johnson explained that this is because the APIs that are required to set up a payment gateway with major cryptocurrency exchanges such as Coinbase are secure, as well as inexpensive. He stated:
“We pay a processing fee for credit cards, and we employ about 40 people in our fraud department. That’s a cost of doing business with credit cards. When we take cryptocurrency, we have a very small transaction fee with Coinbase, much smaller than our credit card processing fee, and we have no fraud prevention department. It’s like a cash transaction. For us, that is a much cheaper way of doing business.”
Overstock’s Crypto Fortunes
Overstock has been interested in cryptocurrencies for quite some time now. Not only do they accept cryptocurrency payments, but they are also working on other aspects of the crypto-world. Overstock, with its subsidiary tZero, is working towards creating a securities trading platform. The company has shown active interest in cryptocurrencies - and it is paying them well too.
Johnson revealed in an address to Washington-based Heritage Foundation that Overstock has been making $68,000 to $120,000 in weekly cryptocurrency revenue. He commented that the revenues vary depending on the volatility of the markets. Johnson also talked about how cryptocurrencies are empowering retail investors to invest in a better and smarter manner. He stated:
“We have somewhere between $68,000 and $120,000 a week in cryptocurrency revenues; people buying sheets and toasters using bitcoin or ethereum or other coins. Today, so many of us can’t participate in the capital markets the way accredited investors or well-connected investors can. And those of us that are trying to raise money have a hard time crowdfunding or raising money in a democratized way.”
Overstock’s cryptocurrency investments and this report of their weekly cryptocurrency revenues caused a wave of optimism in the markets - thereby causing Overstock share prices to surge by over 11%.