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At least here in the US, retailers already do better than this with their closed-loop (merchant-specific) gift cards: you pay them an activation fee to get the
by al2o3cr 8y ago
At least here in the US, retailers already do better than this with their closed-loop (merchant-specific) gift cards: you pay them an activation fee to get the card and they make interest on the money until it's spent.
That also has its own unique problems - if a retailer goes into bankruptcy, the gift cards are likely to be worthless (they're considered "unsecured debt"). Buying gift cards from a brand-new startup would be taking considerable risk.
Then there's the IT integration hassles, since existing closed-loop cards are coded into their POS etc. Adding "Credits" is going to take additional development - why are retailers going to spend money to do that?
The other option would be an open-network style card, but those are typically issued (again, in the US) by companies like MasterCard and Visa & carry the usual processing fees.
- saalweachter 8y agoSince the merchants ultimately want to be paid in USD (or other local currencies, but we'll just say USD for simplicity), you could start a company which takes in USD and gives back a one-to-one token for USD, which can then be either traded back and forth for crypto and associated with your Credits cards. Since this USD token - call it a "Tether?" - is 100% backed by USD, associating with a CC is basically just another debit card with a weird backend at the bank that holds the cash.
- Qworg 8y agoCritically, "Tether" and the dollars that back it would have to be held in a transparent, auditable manner by the company who of course would comply with all regulations. Otherwise, no US bank or major retailer would touch them.