Cryptocurrency as a Payment Method in the Retail Industry : An application of Diffusion of Innovation Theory (DOI) on the characteristics of Bitcoin: the case of Bitrefill

Abstract: Background: The convergence of payment behaviours can contribute to the diffusion of new payment technologies and thus economic performance. There is evidence that the electrification of the retail payment system promotes the performance of the banking sector and economic growth. The retail payment market is a prime example of a two-sided market where new payment instruments need to reach a critical mass of users to become viable and grow further (Martikainen, Schmiedel & Takalo, 2015). Purpose: The purpose of this paper is to analyse Bitcoin, as a payment method, and review the models already used to shed more light on its further potential adoption by retailers. We apply the DOI theory and review the TAM model to determine the underlying characteristics of Bitcoin that will enable further adoption or rejection among retailers. Method: We conduct a case study on Bitrefill AB which offers a rich method for investigating and researching. With the process of interpretation in context, we make inference from the case of Bitrefill in connecting with events and experiences of other retailers (Expedia, Alibaba, Overstock and CheapAir). Conclusion: According to the results, the adoption of Bitcoin relies heavily on positive relative advantages to other payment methods, compatibility and simplicity of its use while negative characteristics that pull it back from being adopted include the complexities in understanding the technology behind it, damaging outcomes varying from the expected.