Switzerland’s largest retailer now accepts crypto – and it’s awful…

Today the Swiss equivalent of Amazon Galaxus announced that they would be accepting cryptocurrencies as payment method. So far media coverage has been mostly positive and Digitec has been praised for being modern. However, I’d like to highlight why Digitec’s implementation of cryptocurrency payments is not how it should be done.

Some information about Galaxus / Digitec

With 2.6M Products Galaxus is Switzerland’s largest retailer and can be compared to Amazon, which has not entered the Swiss Market. Galaxus also owns Digitec, Switzerland’s largest electronics store.

While they offer free 1-day shipping (since Switzerland is a small country even regular shipping only takes 2 days, it can be compared to priority shipping) and great customer service, they have previously been criticised for charging a fee of roughly 2.5% on card payments, which is not common in Switzerland. Since then they have removed the fees.

They also have a blog where they regularly post reviews, guides and promotional content. Along with their acceptance of cryptocurrencies, they have also started writing about cryptocurrenices. Personally, I like their articles and think they are well written. Shoutout to Mr. Bärlocher, a senior editor over there from whom I’ve read nothing but great posts.

Why Digitec’s cryptocurrency implementation is flawed

Here are some key factors about their checkout system :

  • For your information: 1 CHF = 1 USD / 0.88 EUR
  • You need to spend at least 200 CHF to qualify for crypto checkout
  • A fee of 1.5% (3 CHF min.) for using cryptocurrencies is added to the total.
  • You may buy using Bitcoin, Bitcoin Cash ABC / SV, ETH, LTC, BNB, TRX, NEO, OMG, XRP
  • Card payments are free and have no minimum amount

Now, let me explain why the implementation is bad:

The customer has to pay a fee

Digitec states that they don’t charge a fee to pay but that Coinify, their payment processor, will charge the clients an additional 1.5%

To bring this into perspective, credit card companies charge fees of ~2.9% to the merchants. The merchants know about this and include these costs in their price, they can therefore afford to “loose” 2.9% of the sale price.

If Coinify “only” charges a 1.5% fee, Digitec should easily be able to cover this cost and offer fee-free crypto payments.

Why would I pay using cryptocurrencies?

As mentioned earlier, the customers are charged a 1.5% fee. Why would they pay a fee when they can use their credit card for free, which even offers rewards such as airline miles and cashback?

Digitec saves lots of money when the customer pays in crypto, so they should create incentives such as handing down the savings to do so!


A customer’s perspective: Cryptocurrency payments

Purchasing “educational” content won’t show up on your card statement

Your payment details can’t be stolen

Your payment won’t be held for review

If something goes wrong, the only way to get your money back is through the vendor

Unlike your credit card, you don’t get rewards such as miles or cashback

Your hodlings decrease

Your account might get linked to your name


They don’t actually accept cryptocurrencies, they want fiat

All what Digitec did was integrate a payment provider, just like any other company that “accepts crypto”. The payment provider converts the crypto fiat, which is sent to the company. The company never actually gets any crypto.

Now that the prices are moving sideways it seems like this isn’t much of an issue, but things will get ugly when the markets become volatile again, especially when the payment providers lock the price for 15 minutes. Remember Steam accepting Bitcoin? They removed it after BitPay was unable to convert the money into fiat at the correct rate.

It would be much more of a statement if they didn’t offer a 15 minute price lock and simply take the crypto directly and either hold it as such or convert it themselves. This would allow them to accept crypto with virtually no fees. Also, it would show the community that they are actually interested in cryptocurrencies. What I see now is just a marketing move asking crypto enthusiasts to give them at least 200 CHF.

Conclusion

A crypto payment incurs almost no fees and cannot be charged back. Companies need to realize that the customer is actually doing them a favor by paying in crypto. Customers should be rewarded instead of punished for doing so.

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Nice article, finally one that actually reflects about what they said in the press statement. The other news sites just basically repost their press statement… Thanks for calling them out on the payment fee!
I disagree about the removal of the price lock tho, i think just removing the fee is enough :)