When Bitcoin was created more than a decade ago, many people and sceptics of a digital currency preached doom and gloom for and predicted (wrongly) how it would never be worth anything.
Fast forward to 2021, numerous cryptocurrencies have been developed off the blockchain technology, and Bitcoin is still the biggest of them all. Bitcoin’s growth and increased trust have attracted a multitude of companies and businesses to open their doors and accept it as a mode of payment, except Amazon.com (ticker: AMZN).
Amazon, the world’s largest online retailer, has resisted the wave of companies accepting Bitcoin for several reasons. Amazon does not give online shoppers the option to purchase products on its platform using bitcoin, which has not worked in favour of cryptocurrency. Since Amazon is such a big company, accepting Bitcoin would help bring bitcoin usage to the mainstream.
Why doesn’t Amazon accept Bitcoin?
Before we dive into the theories that make the basis of why Amazon doesn’t accept bitcoin, it is worth noting that Amazon does not accept other cryptocurrencies as well. The first reason we can think about is their volatility. It is common knowledge that cryptocurrencies, including Bitcoin, have more volatile prices than government-issued currencies. Bitcoin’s price could be $40,000 when you type in Amazon’s website into the browser, and by the time you put an item in the cart and checkout, it might have already fallen to $38,000 or risen to $42,000. This would present a challenge in the way Amazon prices its products.
Another reason why Amazon is holding back its decision to accept Bitcoin is the uncertainty about the future regulation of the entire cryptocurrency industry. The wild price fluctuation of Bitcoin is a stumbling block to processing its returns. And Amazon’s position is understandable. In April, Bitcoin dropped from its all-time high of over $60,000; it had risen between February and April, to its current price of $32,465.60. Who knows? It could be either higher than that or lower by the time this article is published.
Amazon might already have better deals in place with major credit card and payment services providers like MasterCard, PayPal, and Visa, among others, which is not the case with smaller online retailers. This gives Amazon a better competitive advantage. On the other hand, in an effort to grow, Bitcoin has allowed small online retailers to accept payments at low costs, which puts Amazon at a disadvantage in this case.
Another theory in circulation in the cryptocurrency world suggests that former Amazon CEO, Jeff Bezos, who now serves as its executive chairman after stepping down last week, is not a Bitcoin enthusiast. This is backed up by the theory that the world’s richest man does not support the fact that Bitcoin is unregulated and anonymous. This theory became more popular after the Washington Post published an article in January 2016, “R.I.P, Bitcoin. It’s time to move on.” The article was seen to criticise cryptocurrency, unsurprising because Bezos owns the Washington Post.
There is ongoing work on the cryptocurrency street that Amazon has future plans of introducing its own digital currency to be used on its platform, which means that the company would not want to accept another cryptocurrency that would be in direct competition with its own on its platform.
An indicator of Amazon’s plan was the launching of Amazon Coins in 2013. Amazon Coins are a virtual currency that can either be bought or earned and then used to purchase products on Amazon.com like games, apps and other items from the Amazon Appstore. Each coin is worth $0.01, meaning 100 coins are worth $1. Amazon Coins that you buy don’t expire, so you can keep them for as long as you like, but this is not the case with those that are on promotion, those earned after buying specific items. These expire 12 months after the day you receive them.
As Amazon keeps distancing itself from the cryptocurrency, Bitcoin, albeit price fluctuations, continues to gain traction worldwide. In North America, a whole country named El Salvador made Bitcoin legal tender last month, becoming the first country in the world to do so. Remember, it is different for countries with companies accepting Bitcoin, from a whole country having it as an official currency. However, even though Bitcoin is now legal tender in El Salvador, its primary currency is the US Dollar.
Will Amazon accept Bitcoin in the future?
When Bitcoin picked up the pace a few years after its creation, businesses started accepting it as payment. However, those businesses were not that many and were not big enough to influence big companies to follow suit. This is why in April 2014, Amazon, which was already in the Big Tech league, said that it would not accept the cryptocurrency because Amazon customers were not calling for its implementation on the Amazon platform.
Despite earlier promises, that is not the case more than seven years later. Currently, over 15,000 businesses worldwide accept Bitcoin as payment, including big corporations and companies like Microsoft Corp, PayPal Inc., and Overstock; among others- Before Elon Musk re-thought the decision, it had been announced that Telsa Inc. would accept Bitcoin as payment for its cars.
The fact that these major corporations accept Bitcoin could lure Amazon into adopting it too in the future.
In 2017 and 2018, Amazon bought several cryptocurrency-related domain names and a streaming data marketplace that cites bitcoin use as a case study in its patent. This created speculation that Amazon may accept Bitcoin in the future, but it is yet to be seen.
There is a way to buy items on Amazon using Bitcoin.
Although Amazon does not accept Bitcoin, there is a way you can buy items on its platform using Bitcoin, and this is through gift cards. Amazon accepts gift cards as payment, and there are numerous gift card shops online where you can buy Amazon digital gift cards using Bitcoin. The trick is to buy a gift card using Bitcoin and then use that gift card to pay for items on Amazon. Examples of such gift card hubs include RewardsPay Inc., eGifter.com, and Gyft Inc., among others.