Will accepting bitcoin make your restaurant more successful?
As a tech-savvy restauranteur, you’ve probably heard the terms blockchain technology, cryptocurrency, and bitcoin. If you need a refresher, then you’ll appreciate Daniel on Dwe decrypts’ YouTube video describing blockchain using a restaurant analogy.
Perhaps you’re one of the millions of cryptocurrency users or investors counted in a landmark study by the University of Cambridge, which reports that there are:
2.9-5.8 million unique virtual currency users worldwide.
However, with volatile stock prices and limited acceptance at local restaurants and cafes, cryptocurrency hasn’t hit the mainstream.
What does this mean for restaurants? Should blockchain technology be on your radar? According to experts in the industry, blockchain technology is here to stay.
Barriers to widespread U.S. use
For Americans to adopt cryptocurrency as a widespread form of payment, several well-known difficulties need addressing. Right now blockchain technology is:
- Difficult to understand, partially contributing to and as a result of usability issues. It’s tough to make everyday purchases, like paying for food delivery from your favorite restaurant.
- Suffering from reputation problems, from both a lack of trust in the system to the stigma of the dark web.
- Facing wildly fluctuating value, leading some to believe it’s not a viable long-term investment, while others invest, but don’t want to spend it on a coffee or meal at a local restaurant.
Why do restaurants accept cryptocurrency?
If restaurant guests aren’t using bitcoin to pay for their cocktail hour drinks or delivery order, then why bother accepting virtual currency at your restaurant?
1. Attract a younger crowd.
Owner of Monica’s Restaurant, Atila Ajdinovski told the North Jersey Record that:
He hopes to lure new and younger customers to the Italian restaurant through the alternate payment systems.
Ajdinovski has the right idea in aiming for a younger, wealthier, tech-friendly crowd. Research completed by companies like Clovr, show:
Men are almost twice as likely as women to have invested in cryptocurrency.
Moreover, Clovr data demonstrates that millennial men earning $75,000–99,000 are the biggest cryptocurrency investors.
2. Use for positive publicity and promotions.
Nicholas Kalcanides, whose family owns Helen’s Pizza, told the North Jersey Record that restaurants can afford to offer deals for those using digital currency because:
The relatively low transactions fees of 10 to 20 cents for Bitcoin and about 2 cents for Litecoin—compared to 2 to 3 percent for credit cards make it worthwhile.
Chef-owners add physical and digital signage declaring their adoption of cryptocurrency, which creates a unique selling point. Restauranteurs use publicity to differentiate their eatery from another restaurant down the street.
3. Participate in newly-developing technology.
Marco Iansiti and Karim R. Lakhani, two professors of Business Administration at Harvard Business School, wrote in the Harvard Business Review that blockchain is a foundational technology. However, they also say:
for chef-owners and restauranteursGET IT NOW!
While the impact will be enormous, it will take decades for blockchain to seep into our economic and social infrastructure.
Iansiti and Lakhani consider accepting bitcoin payments a low-risk business strategy because:
The infrastructure and market for bitcoin are already well developed.
Whether you decide to wait it out or incorporate blockchain technology into your marketing strategy now, cryptocurrency—both as a restaurant payment method and as a digital ledger—are here to stay.
Accepting cryptocurrencies won’t dramatically increase its use as payment at your restaurant. But it might boost your restaurant brand reputation and enhance customer experience, setting up your eatery for success.