Expedia, the travel service company that helps customers book flights, cruises, hotels, and more, is now accepting Bitcoin to pay for hotel lodging. Customers who choose to use Bitcoin when they finalize an Expedia transaction will be taken to a separate web site and will be asked to authorize the transaction. The customer will then be redirected back to Expedia to seal the deal.
Bitcoin has seen its image and the public’s interest move higher this year and Expedia says its customers have increasingly asked for its acceptance as legal tender. Michael Gulmann, Expedia Vice President of Global Product, says conditions are right to add Bitcoin as a payment option.
"It came down to the right timing, both for Bitcoin as a currency, and for Expedia in our lifecycle," said Gulmann.
Bitcoin acceptance might seem like a risky proposition for any business. But according to Expedia and others that play the Bitcoin game, the setup is simple and the costs are actually quite low. Coinbase, a company that processes payments in Bitcoin, charges fees for its services, but they are much less than those of credit card companies. Visa and Mastercard, which comprise the bulk of online travel payment options, charge about 2 to 3 percent per transaction. Coinbase charges only 1 percent, a savings of between 1 and 2 percent from the rate charged by credit cards.
Multiply 1 to 2 percent times the sales volume that Expedia experiences each month and you have some significant money. This is why many in the business feel that the decision to accept Bitcoin for payment is really not very risky at all and could save the company significant fees in the long run.
Expedia will have to sit back and see how popular its Bitcoin option truly is because at this point, it’s really anyone’s guess. But if it translates into significant savings for Expedia- and there is reason to believe it will- we can expect competitors and other online businesses to follow suit.