On Tripio, a blockchain-based hotel booking platform, Binance Coin (BNB) users are now able to book 450,000 hotels and residential accommodations using the BNB crypto token.
On December 4, Tripio officially announced a strategic partnership with Binance to enable more than 10 million active users in the Binance ecosystem to utilize BNB as one of the main currencies on the Tripio platform to process bookings.
— CZ Binance 🔶🔶🔶 (@cz_binance) December 4, 2018
Importance of Merchant Adoption
Throughout the past two years, many large-scale conglomerates like Expedia, Microsoft, and Steam have announced cryptocurrency integrations. In July, a major Japanese point of sale (PoS) service provider was set to integrate Bitcoin for its hundreds of thousands of retailers.
Several weaknesses of cryptocurrencies as an asset class led leading merchants to temporarily give up on adopting digital assets as a payment method, and all of the abovementioned initiatives came to a halt.
Long verification periods, high volatility, and lack of liquidity were the three major factors which created a difficult ecosystem for merchants in the past, which have been solved through the implementation of scalability solutions, emergence of fiat on-ramps, and stablecoins.
In May, PayPal CFO John Rainey said:
“Because of the volatility of the cryptocurrencies, the merchants saw swings in crypto that threatened the viability of their businesses. If you’re a merchant and you have, let’s say, a 10 percent margin on a product that you sell and you accept bitcoin, for example, and the very next day it moves 15 percent, you’re now underwater on that transaction.”
Merchants have been actively exploring alternatives to PayPal and legacy systems for many years because of their high fees. On PayPal, conversion and base transaction fees often result in 5 to 6 percent of the transaction, not just for merchants but for buyers and individual users.
Cryptocurrencies offer an efficient and practical alternative to existing centralized systems for merchants, and incentive for merchants to ditch high fee platforms to adopt consensus currencies.
However, the cryptocurrency sector is still yet to capture the awareness of merchants, and there exists a significant number of steps to be taken to achieve mainstream merchant adoption.
Until merchants adopt cryptocurrencies, critics will most likely continue to push the narrative that even if it costs less than a dollar to process hundreds of millions of dollars on the Bitcoin blockchain network, if users cannot use it to purchase products and services with both online and offline merchants, the use case of the asset is limited.
The partnership with Binance and Tripio to open BNB to more than 450,000 hotels, following Tripio’s $20 million funding round in March led by major venture capital firms including OK Blockchain Capital, Ceyuan Ventures, Node Capital, F2Pool, and GENESIS Capital, represents an important milestone for cryptocurrency merchant adoption.
The next step in driving cryptocurrency merchant adoption is to lead major platforms like Expedia, Microsoft, and Steam to reconsider the integration of cryptocurrencies.
As the infrastructure surrounding the asset class strengthens and the awareness of digital assets generally increases in the long-term, leading platforms could naturally reconsider the possibility of adding digital assets as payment methods.
The volatility of cryptocurrencies, which the PayPal CFO described as an issue for merchants, have also been addressed with the emergence of regulated and audited stablecoins.
The cryptocurrency community has to continue building and strengthening the infrastructure surrounding the asset class to encourage merchants and large-scale conglomerates to consider the integration of digital assets.