Bitcoin advocates have long tried to ditch the cryptocurrency’s reputation as a means to untraceably pay for illegal mind-altering substances. Paying for legal mind-altering substances may be a good first step.
While Microsoft now accepts Bitcoin for some digital purchases and ATMs are popping up that can quickly exchange Bitcoin for cash, buying lunch or a car with the digital currency seems far off. But your next drink can easily be bought with Bitcoin now.
Seattle startup Hotspot is adding Bitcoin support to their drink deals app today. Users can now pay for discounted drinks with Bitcoin just as easily as if they were using a credit card in the app. But this isn’t just to help cryptocurrency enthusiasts spend their digital money, it’s also a way for the Hotspot’s bar and venue partners to take home some extra cash as well.
“One of the big things that we realized pretty early is that these businesses … [have] 10 to 15 percent margins and anywhere between 3 to 4 percent of that goes toward credit card processing,” Hotspot co-founder and CEO Jasjit Singh said. “That, we thought, was pretty egregious.”
Bitcoin, Singh said, allows bars to pay between half a percent and one percent on fees, meaning that they can keep more of their already slim margins for rent, paychecks and other costs.
And for merchants, this is an easy way to start accepting Bitcoin as well, even if they don’t really know what Bitcoin is, since Hotspot is handling transactions from both credit card and Bitcoin users.
“We just give them cash,” Singh said. “A lot of our partner venues are not maybe as technically inclined as we are, and so they just see more money than they would have otherwise [since the credit card fees aren’t being taken out]. We take care of all of the converting Bitcoins to dollars and so on.”
Hotspot is working with payment processor Braintree to enable the Bitcoin transactions, which are now available at all Hotspot partner venues. At launch, users will be able to connect Coinbase wallets, thanks to Braintree’s partnership with the Bitcoin wallet service.
Hotspot’s current model lets its 7,000 users pay for discounted drinks at about 60 venues across Seattle. However, the app is also organizing ongoing open-bar get-togethers, where users pay a $10–$15 entrance fee through the app, which means you may be able to pay for a whole evening out with just cryptocurrency.
Hotspot is also working with a few partner venues to let you pay your whole tab through the app soon, cutting down on the risk that you’ll leave your credit card at the bar. It’s all part of their mission to reduce the friction between venues and their customers.