From now on shopping for fine jewellery and watches just became a whole lot more accessible. That special someone may well be able to get their engagement ring, or eternity ring bought via bitcoins. Verichannel, a company that builds and operates digital platforms for jewelers, as well as FMX, a private trading platform for Forevermark diamonds and jeweler, has announced that it has concluded an agreement with Coinapult, that will enable jewellery shops to accept Bitcoin as easily as they would accept Visa or PayPal. Claire Adler, writing in today’s Financial Times reports that Verichannel says it has had “tremendous interest” from retailers, launching its service at the JCK jewellery show in Las Vegas this week.
[dropcap size=small]A[/dropcap]dler describes how retailers that sign up to the scheme: “Receive their preferred currency in their bank accounts without having to touch Bitcoins. Payments are recognised and processed nearly instantly. The advantage, the company says, is that payments cannot be reversed, unlike those made by bank transfer, credit cards, debit cards and even PayPal. This means retailers can ship items immediately after they receive payment, and suppliers can be paid straightaway.”
Jacques Voorhees, CEO of Verichannel, says: “One of the biggest problems facing retail stores is the risk of credit card reversals and, with today’s ultra-thin margins, the percentage-based processing fee [on credit cards] doesn’t help.”
His father, Erik Voorhees, is a co-founder of Coinapult.
“The goal is to build technology for this industry around the advantages of Bitcoin. The family connection means it’s that much easier to work together to make sure it’s done right,” Jacques Voorhees says.
Verichannel charges $3 per transaction, so if someone buys a $5,000 engagement ring, and some people do…, the retailer gets a transfer, irreversible, of $4,997 into their bank account. When Overstock, the US retailer moved earlier this year to accept bitcoins, they received $126,000 in their first day from 800 transactions. Tivol, the US jewellery retailer, also accepts Bitcoin and seems to be doing very well.
The one problem that concerns some jewellers is the possibility that unscrupulous characters may well use bitcoins to buy bullion and jewellry and that the retailers themselves might find themselves coming under the eye of the regulators. One on-line jewellery retailer, Tobias Kormind, described how: “If we see a surge in demand from our customers to pay using Bitcoins, we may reconsider.”
Annabelle Gauberti, founding partner of Crefovi, a law firm specialising in the creative industries, advises jewellery retailers to exercise care when selecting Bitcoin companies to process transactions. She suggests ensuring the Bitcoin company has implemented an anti-money laundering and customer compliance program.
“Luxury houses and jewellery retailers need strong security measures and monitoring tools in place to safeguard the security and non-breachability of their Bitcoin wallets,” says Annabelle Gauberti of Crefovi, a law firm specialising in the creative industries.
However, if Verichannel is offering almost instant transfers between bitcoins and fiat money the security of their Bitcoin Wallets might not be as big an issue. It seems that the process of educating retailers to the benefits of cryptocurrencies must continue. Perhaps, the more savvy retailers acceptances of crypto may encourage consumers to come on board.
Featured image by Shutterstock.
Last modified: June 7, 2014 08:02 UTC