In 2014, Expedia, a US-based global travel company, announced plans to accept bitcoin transactions as a form of payment. During that time, Expedia became the latest big company to incorporate cryptocurrency into their payment system.
The initial plans included accepting the virtual currency for hotel bookings only, while the company said it plans to convert its bitcoin holdings into USD every 24 hours. The company initially chose Coinbase as its partner in this process.
“(The company is) in a unique position (to) solve travel planning and booking for our customers and partners alike by adopting the latest payment technologies,” said Michael Gulmann, the global vice-president of the company, in 2014.
Unfortunately, the romance came to an end in 2018. The spokesperson of the company confirmed that they “would not accept bitcoin for hotel or flight bookings and that it was evaluating alternative payment options”.
The initial media reporting pointed out several potential reasons that influenced Expedia’s decision to stop accepting bitcoin: customer dissatisfaction about the payment process, refund policy, and the fact that some customers had to pay with their credit card after they already paid in bitcoin.
In addition, Forbes’ Luke Fitzpatrick, points out three major reasons behind Expedia’s decision.
- Unstable nature of cryptocurrencies – Coinbase, Expedia’s partner, decided to suspend custodial solutions for merchants in 2018, which further aggravated the situation that already proved to be difficult for Expedia.
- Lack of commercial adoption – Cryptocurrencies are still far away from massive worldwide adoption. That’s the reason way Fitzpatrick notes that “cryptocurrencies in their current form are primarily being used as an investment, not as a digital currency”.
- Fiat conversion – Although Expedia accepted bitcoin, the mere fact it committed to transfer its bitcoin holdings to USD every 24 hours meant that the company ultimately preferred USD — not bitcoin.
Rumors about Expedia’s decision to stop accepting bitcoin started popping up in the last week of June 2018. In the following days, the world’s largest digital currency hit an 8-month low of $5,809.
“Expedia chose to view cryptocurrency as a speculation rather than for its function. With tools like BitPay, why any major company would see crypto this way remains a mystery,” said Kyle Herron, Chief Growth Officer of Frontier Mining, to Forbes.
Although Expedia’s decision sent shockwaves throughout the crypto community, it serves as a lesson to the wider blockchain and cryptocurrency community; while the world is undeniably heading towards a bigger blockchain and crypto adoption, it is going to be a rocky ride for sure.