Bitcoin is taking over BizAv as we know it.
As technology keeps evolving, it’s taking all aspects of business aviation with it including methods of currency. In a recent article, the NBAA has declared Bitcoin the newest form of payment trending throughout charter operations. Bitcoin, a popular internet-based currency, is the world’s “first decentralized peer-to-peer payment network” and has been claimed to be “pretty much like cash for the Internet” by their website. This cryptocurrency (crypto referring to it’s highly encrypted nature, protecting consumer data) has many benefits that make the switch to this newfound payment seem like a no brainer. But with a recent severe market correction, is Bitcoin really where Part 135 operators should be moving? CTS has the scoop on pros and cons of the application, and why so many charter operations are turning this accessible, consumer-requested product.
There are many positive reviews and outcomes from using Bitcoin that draw many consumers to this product, and why so many operations are turning to it as well.
- Let’s talk fees, first. There are no fees to receive bitcoins and the service allows senders to control how large of a fee they pay. This makes the application extremely desirable to consumers, as many e-banking systems have a non-negotiable fee attached for both senders and receivers.
- Bitcoin is encrypted and eliminates any instance of fraud. If you accept credit cards or services like PayPal, you run the risk of charges being reversed from an identity theft situation. With Bitcoin the cost of fraud is no longer pushed onto merchants as charges are irreversible and completely secure.
- International payments are a breeze with the service. There’s no bank or middle man to make consumers and businesses alike wait extended periods of time for payments to clear, and there are no fees attached with international charges to bog down the bottom line on your operation.
- There is a potential for new clients that previously wouldn’t have considered your operation if you offer Bitcoin as a payment option. Bloomberg recently wrote that more than 58% of Bitcoin users were between 18 and 34 years old. This is one reason why Wasim Omar, flight adviser with PrivateFly, turned to the service. He noted that their internal reports show that customers using Bitcoin are on average four years younger than their typical customers.
- View more features of Bitcoin for businesses here.
Although the pros may seem appealing, there are some things with cryptocurrency to be aware of.
- As previously stated, there was a huge market correction at the end of 2017, making users turn away and be leary of using the service. David Gitman, executive director of Monarch Air Group, recently stated, “there was a noticeable drop in interest [in paying for flights with cryptocurrency] when the bitcoin price dropped.”
- Many business-heads have extreme opinions, both positive and negative on the cryptocurrency. Bill Harris of Intuit and PayPal says, “Bitcoin is a scam. In my opinion, it’s a colossal pump-and-dump scheme, the likes of which the world has never seen.”
- See more reviews, both good and bad, of Bitcoin on Bloomberg.
Despite these downfalls in the system, there is a way for you to protect your operation if you choose to turn to this alternate form of payment. Fabio Hausammann, managing director of Premium Jet AG, said, “we looked at [Bitcoin risks] and established an internal calculation model; as a result, when we convert a flight price from Euros to cryptocurrency, we add something in order to shield us a little bit against that.”
With such a turbulent market, is Bitcoin really the proper choice for your operation? We suggest if you plan to use the service, you protect yourself as Hausammann has for Premier Jet. Whether leaning towards the product or not, it’s important to remember that your consumers should be your number one priority (after safety, of course). Adapting to their wants and needs is an important way to make them feel valued and set your operation apart from the rest. Mobile-friendly payment options, both cryptocurrency and e-banking methods, are becoming extremely popular. Offers like one-click payments and finger print encrypted transactions are the wave of the future and providing these easy methods of payments is just what your consumers want. Gitman summed up the cryptocurrency phase nicely when he said, “some people say the bubble will burst today, tomorrow, a year from now; some say this is the new way of payment. In my opinion, it doesn’t really matter which opinion you personally hold. Whether it will be here tomorrow or not, today it’s a reality.”