This week we had the privilege of purchasing drinks with bitcoin and speaking to Alex Likhtenstein, owner of EVR – the first restaurant/bar in New York City to accept bitcoin. A full walkthrough of the transactional process and highlights from our conversation with Alex are below.
Overall the transaction experience showed immense promise as an alternative payment technology, but had some drawbacks that are difficult to overlook.
After consuming a round of single malts, it was time to test the world’s favorite new currency as a true medium of exchange. We informed our bartenders we’d like to pay with bitcoin and they returned with both a physical check and a tablet where the total had to be manually entered into the BitPay app, as bitcoin is not currently integrated with their legacy POS (point of sale) system.
The next step was rather awkward: they had to ask me what I’d like to tip since, unlike credit cards, the amount cannot be simply added to the charge before batching. Theoretically, they could have let me overpay by a tip amount, so I have to imagine this will drop from the process as people become more familiar with the system.
|The final check is ready||Scanning the check with our mobile wallet|
From there the process was nearly seamless. I scanned the QR code on the tablet check using my mobile wallet app and entered the payment amount. Seconds later, the bartender’s tablet showed a green light indicating the payment went through and the transaction was complete.
Easy and fast – took us a minute to learn the system, but doing this a second or subsequent time would be simple.
Fed our deep, burning desire to buy whiskey with bitcoin in the real world.
The payment amount had to be entered manually into the tablet, then entered manually into our mobile. Deeper integration of BitPay into the POS system will be a welcomed change here.
The bartender had to wait with the tablet as we entered the payment info and the transaction processed. I could see that becoming a frustrating use of their time.
After testing the system we caught up with EVR owner Alex Likhtenstein, who provided some unique insight. His responses below are paraphrased for the purpose of continuity of this article unless otherwise indicated.
Why did you initially start accepting bitcoin?
I’ve been a bitcoin enthusiast for a while and have wanted to accept it since we opened in January. I’ve been bugging Charlie [Shrem, CEO of BitInstant] to help me figure out how to implement this since before he was invested in EVR, but until recently there wasn’t a good way to do so.
How many people have used bitcoin since you began accepting them on April 8?
We’ve done approximately $20,000 equivalent of sales, the majority from bottle service. It’s difficult to say the number of people since wallets are anonymous and there may be repeats, but I’d estimate 20-50 individuals, with many of them paying for a group.
Can you explain how the backend of this transaction works for our readers?
We use a BitPay app to facilitate the transaction. The BTC price reflects the current market-equivalent USD value at the time of purchase. Every day, BitPay automatically sends an ACH to our bank account in USD for the last 24 hours of transactions. The amount we receive reflects the USD value at the time of the transaction, rather than the time of the deposit.
So you don’t take any direct BTC exposure, it’s purely for transactional purposes?
That’s correct, we see the USD value we charge the customer hit our account just like if we were using any other payment method.
What fee do you pay to BitPay for this service?
It’s around 1%, far less than credit card fees.
Do you charge any sort of premium or offer a discount for using bitcoin?
Right now it’s the same as the USD price, but we haven’t ruled out discounts in the future.
What was the reaction from your bartenders and servers?
They thought it was weird at first, but we do a few transactions per night on weekends, so they’re getting used to it quickly.
As a merchant, what do you see as bitcoin’s greatest strengths?
Lower fees and no chargebacks are great. We also see deposits in our account less than 24 hours after the sale; credit cards transactions that go through banks usually take about three days.
It would be difficult to do high volume in BTC given the current logistics with the tablet. We would need better integration with our POS system for this to be possible on a larger scale.
Do you think bitcoin is viable as an alternative currency? Total replacement?
“I don’t think it will replace government currency, but it could be a viable alternative. Right now it’s a commodity that can be implemented in everyday use.”
Do you have / trade / invest in bitcoin?
“Yes, but not a ton. I’m not an expert like Charlie.”