The possibility that the blockchain and bitcoin has the potential to fix a large number of the many problems that the world of payments current faces is something that Brian Billingsley, the CEO of Klarna North America strongly believes to be true.
Even with an ever growing number of startup companies offering online checkout services are starting to use bitcoin as an accepted method of payment Billingsley’s company which is based out of Sweden, covers 18 different markets and has more than 1200 employee is currently not ready to join them. The reasoning behind this is probably the same for many other companies and that is it is still unclear what value the digital technology holds for online commerce and payments technology.
At the Keynote 2015 conference earlier in the week Billingsley mentioned that as part of Klarna’s bitcoin strategy one of the main goals for his company was to get rid of one of the big problems that the bitcoin digital currency still hadn’t overcome and that was friction for consumers using bitcoin to make purchases.
As part of their efforts to introduce bitcoin trading in their business Billingsley mentioned that they were trying to ascertain when consumers would be allowed to trade with over 50,000 merchant partners using bitcoin through talks with Swedish regulators and were also actively tracking the development of any technology to be used for bitcoin.
One thing that Billingsley did stress even though his company was looking to move into the bitcoin arena was that Klarna’s merchant partners would be unlikely to see any rise in sales by taking up bitcoin as a method of payment even though the introduction would appeal to those with an interest in technology.
One of the big issues Billingsley had with the use of bitcoin in e-commerce was, given that there was already a certain amount of friction in the process of making on-line payment, how the barrier of having to first buy bitcoin before it could be used could be removed from the e-commerce process.
Even in those areas where it could prove useful he advised that this would prove to be a stumbling block that would weaken cases for the technology’s usability.
The concept for most consumers would be that no matter how simple the technology gets to buy bitcoin most would see little point in doing so and this is a problem that even the biggest companies trying to bring in bitcoin payments would face.
The best model currently available, according to Billingsley, would be for a large number of merchants group together to try and bring down transaction fees similar to the way that the Merchant Customer Exchange (MCX) have.
The greater reach of the smaller merchants globally is one of the possible areas that the blockchain and bitcoin could solve. With the hefty taxation from sales online these merchants could be put in a position where they would need to create a number of different corporate identities worldwide.
This would make one of the biggest problems for many merchants the ability to work out how to scale their business. The idea of using bitcoin for these businesses seems more compelling model compare to the current consumer model where it would be increasingly difficult to move them from their regular currency to bitcoin the less technically knowledgeable they became.