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When you look at all the purchases you make over a week, I assert you are only interested in paying the overhead of open, reversible transactions for very, very

When you look at all the purchases you make over a week, I assert you are only interested in paying the overhead of open, reversible transactions for very, very few of them. I think we'd have a healthier view of credit cards if we indeed only used them when we actually wanted their features beyond the sheer convenience. I use bitcoin online where possible precisely because I know I am not going to make a chargeback down the road and I don't want to give someone pull access to my bank account. Only few banking services offer virtual/"OTT" card numbers. If chargebacks were so critical for every purchase, then everyone would be scared of ever using cash. But that's not why people don't use cash.

rifung 8y ago
> When you look at all the purchases you make over a week, I assert you are only interested in paying the overhead of open, reversible transactions for very, very few of them. I thought that the benefit of reversible transactions would be for the case someone steals my credit card and uses it. If credit card companies could tell it wasn't me who used it they could have declined it in the first place. Since I have had other people charge things to my credit card before, I'll assume that's not possible and so I'm thankful the transactions are reversible. There is also the case where there's a bug with payment processing. My friend was recently charged for 5 computers because Lenovo's website kept saying there was an error with the transaction when it actually went through.
- swift532 8y ago
  Well with Bitcoin it's trivial to prove that a transaction went through, and you'd only pay for 5 computers if you carelessly transmitted a transaction without reading the amount.
  - maccard 8y ago
    > Well with Bitcoin it's trivial to prove that a transaction went through Sure, 10 minutes after you request it.
krrrh 8y ago
This misses two important points about interchange fees. First, is that fees already vary based on fraud potential, with higher fees charged for online transactions than in-person PIN and chip transactions. Second, a large portion of the interchange fees are remanants of older less-digitized systems. The surplus from improved systems has been transferred into benefits for consumers in preference to reducing the cost to retailers (rewards points, extended warranties, bundled insurance, and extension do credit to riskier classes of borrowers). There have been class-action lawsuit launched by retailers in Canada and the US which sought redress on high fees, but only resulted in modest anti-trust actions (eliminating the clauses that disallowed retailers to give discounts for paying with cash, or charging a surcharge to customers who use rewards cards that carry higher fees for instance). Contra to this is the example of Australia which took a regulatory approach and capped interchange fees at a level that allowed banks to cover thier costs, including fraud (a fraction of the fees in North America). This resulted an massive reduction of rewards programs, and greatly reduced the fees paid by retailers. TL;DR: the costs associated with credit card fees is an accident of history and contingent on the actions taken or not taken by regulators. They have less to do with fraud or the cost of processing transactions than most people assume. Reference (though there are better ones with more detail if you dig around for reports from the Australian government): https://en.wikipedia.org/wiki/Interchange_fee#Australia_and_New_Zealand https://en.wikipedia.org/wiki/Interchange_fee#Australia_and_...

rifung 8y ago

> When you look at all the purchases you make over a week, I assert you are only interested in paying the overhead of open, reversible transactions for very, very few of them. I thought that the benefit of reversible transactions would be for the case someone steals my credit card and uses it. If credit card companies could tell it wasn't me who used it they could have declined it in the first place. Since I have had other people charge things to my credit card before, I'll assume that's not possible and so I'm thankful the transactions are reversible. There is also the case where there's a bug with payment processing. My friend was recently charged for 5 computers because Lenovo's website kept saying there was an error with the transaction when it actually went through.

swift532 8y ago
Well with Bitcoin it's trivial to prove that a transaction went through, and you'd only pay for 5 computers if you carelessly transmitted a transaction without reading the amount.
- maccard 8y ago
  > Well with Bitcoin it's trivial to prove that a transaction went through Sure, 10 minutes after you request it.

krrrh 8y ago

This misses two important points about interchange fees. First, is that fees already vary based on fraud potential, with higher fees charged for online transactions than in-person PIN and chip transactions. Second, a large portion of the interchange fees are remanants of older less-digitized systems. The surplus from improved systems has been transferred into benefits for consumers in preference to reducing the cost to retailers (rewards points, extended warranties, bundled insurance, and extension do credit to riskier classes of borrowers). There have been class-action lawsuit launched by retailers in Canada and the US which sought redress on high fees, but only resulted in modest anti-trust actions (eliminating the clauses that disallowed retailers to give discounts for paying with cash, or charging a surcharge to customers who use rewards cards that carry higher fees for instance). Contra to this is the example of Australia which took a regulatory approach and capped interchange fees at a level that allowed banks to cover thier costs, including fraud (a fraction of the fees in North America). This resulted an massive reduction of rewards programs, and greatly reduced the fees paid by retailers. TL;DR: the costs associated with credit card fees is an accident of history and contingent on the actions taken or not taken by regulators. They have less to do with fraud or the cost of processing transactions than most people assume. Reference (though there are better ones with more detail if you dig around for reports from the Australian government): https://en.wikipedia.org/wiki/Interchange_fee#Australia_and_New_Zealand https://en.wikipedia.org/wiki/Interchange_fee#Australia_and_...