Expedia embraces Bitcoin
Today we announced that Expedia is now accepting bitcoin from customers who want to purchase hotels via Expedia.com. I met up with my colleague who led this project, Michael Gulmann, vice president of global product, to discuss the news and why Expedia made a foray into this new technology-driven payment platform.
Tarran Vaillancourt: For those who may not be familiar with Bitcoin, what exactly is it?
Michael Gulmann: At the most basic level, Bitcoin is a type of digital currency that allows people to send payments online quickly and securely. It is made up of thousands of computers, run by individuals all over the world. Expedia is all about connecting our customers to some of the best experiences life has to offer; luckily, we are also in the perfect position to help make travel planning and booking easier by investing in the latest technologies and emerging platforms such as Bitcoin! Our people are passionate about technology, so we’re constantly looking to new and emerging tools that help connect and improve the entire online travel experience.
TV: Very interesting! But it sounds a little risky too. Why is Expedia choosing to accept it now?
MG: You’re right in that Bitcoin is still a relatively new technology with a small user base compared to the other more traditional types of payments we use today. Because Expedia is not interacting with Bitcoin directly, there’s limited risk to the company in making this choice. We offer customers hotel prices in U.S. dollars with an option to pay in bitcoin. We then rely on Coinbase, our bitcoin payment processor, to handle the bitcoin transactions. It’s quite similar to how we accept other forms of currency, particularly PayPal. A customer comes to our site, wants to pay for a hotel, decides to use PayPal, we indicate to PayPal that there’s a customer ready, PayPal conducts the payment, and sends us an indicator that the customer has paid, and we can provide the customer a receipt. Pretty easy, overall!
It’s inevitable that specific currency markets will fluctuate and it’s up to our customers to determine how they feel most comfortable paying. At the end of the day, we felt this was an important step in improving the online travel experience on Expedia.com by giving travelers and customers more choices and greater flexibility in the way they transact with us.
TV: Can customers use bitcoin to purchase flights or anything other than hotels? And beside Expedia.com, are any of our other global sites now accepting bitcoin as payment too?
MG: No, not at this time. We’re focusing on hotels on Expedia.com for now. That said, it’s important to remember that any customer who shops for hotels on Expedia.com—even if they are based or located somewhere other than the United States—will still be able to submit bitcoin as their form of payment for hotels.
TV: What is Expedia planning to do with all of the bitcoin payments received from customers?
MG: Like I mentioned, we’ve teamed up with Coinbase, a trusted third-party bitcoin payments processor, to directly handle all the processing and transferring of actual bitcoin funds with each of our customers. You see, Coinbase immediately converts all customer bitcoin transactions into U.S. dollars with its instant exchange feature, so we at Expedia never actually collect or hold any bitcoin.
TV: So what happens if I were to cancel a hotel reservation that was purchased using bitcoin? Would I still be able to receive a refund?
MG: Of course! Plans change all the time these days and you shouldn’t have to be locked into a hotel reservation just because you paid for it using bitcoin. If a customer decided to cancel a hotel room paid for in bitcoin, she would receive a refund in bitcoin, provided the booking was for a refundable room. The refund would be based on the amount (in U.S. dollars) that was paid for a room, and Coinbase would refund the customer that amount based on the current bitcoin exchange rate. Depending on the bitcoin market place, the amount of bitcoin received in a refund could be higher or lower than what was initially paid, but the dollar amount reimbursed would remain the same. It’s quite similar to other refunds you’d receive from Expedia.com.
TV: For all the road warriors out there, can I now use bitcoin to book hotels on my smartphone or tablet?
MG: No, although that shouldn’t stop them from downloading the Expedia mobile app. Travelers can still access their hotel reservations—even if they were purchased using bitcoin—and other Expedia itineraries from the app using the Trips feature to stay organized and up-to-date during their trip. Plus, after the recent Media Lounge update, you can now find helpful travel-related apps and content to download for free. Can’t beat that!
TV: Since this is all so new, what advice do you have for people that don’t currently have bitcoin but think this sounds really cool and want to get some to try it out on the site?
MG: I’m certainly not in the market of issuing financial advice. Just like with any new platform, I’d recommend you do a lot of research before jumping in. But for those of you with bitcoin already, we encourage you to test it out on our site!