January 06, 2014

Beauchamp-McSpadden, a multiline insurance agency located in Indiana, has been accepting Bitcoin payments for the past six to nine months. Although Bitcoin is fairly new to the retail space, the company has found that the benefits of accepting Bitcoin outweigh the risks.

“Bitcoin is pretty much like cash for the Internet,” the currency’s website explains. Each Bitcoin has a unique identification number and fluctuating value determined by a free market. Users can send and receive Bitcoins through a personal wallet located in a computer program or mobile app. The currency has recently been making noise in the digital payments space. More consumers are looking into obtaining Bitcoin and more retailers are expanding their payment options to include it.

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Now, Bitcoin has made its way into the insurance industry. “I didn’t really see a downside to it,” says Parker Beauchamp, president of Beauchamp-McSpadden, of allowing customers to pay in Bitcoin. “Even if it’s not a long-term option, we felt that we needed to be involved early.”

Accepting Bitcoin can be risky. “We didn’t want to be tied to something negative,” Beauchamp explains, and negative spotlight was a primary concern. He initially feared that others would view Beauchamp-McSpadden as a Bitcoin promoter, or that the company would be perceived as trying to avoid recognizing Bitcoin as income.

The Bitcoin payment system was implemented without error, and so far none of Beauchamp’s concerns have come to fruition. Beauchamp-McSpadden now accepts Bitcoin across all lines of insurance through Bitpay, a payment system that functions similarly to PayPal. Each payment is handled with caution, says Beauchamp, and the company pays required premiums and taxes associated with Bitcoin. In addition, consumer payments are cashed out the same day they are received, which helps to avoid problems caused by value fluctuations.

The company marketed its new payment strategy through announcements on its company website and various Bitcoin forums. From there, the news spread through word-of-mouth. The results so far have been largely positive: Beauchamp-McSpadden has received dozens of exclusively new Bitcoin-paying customers from across the country. While current customers can pay with Bitcoin, Beauchamp says, none have chosen to do so.

Beauchamp is happy with the results that Bitcoin has presented thus far but is unsure whether its success will be permanent. “I don’t know the future of Bitcoin, honestly, but I don’t care,” he admits. “If you want to pay [with Bitcoin], we’ll accept.” As long as it poses a convenience to customers, the option is there to stay, he believes.

ABOUT THE AUTHOR
Kelly is an associate editor for Insurance & Technology. Prior to joining InformationWeek Financial Services, she was a staff writer for InformationWeek and InformationWeek Education. Kelly has also written for trade ...