3 ms·

Chargebacks are useful to consumers not because of evil merchants who can steal their money (merchants in general are not evil and care about reputation). The r

Chargebacks are useful to consumers not because of evil merchants who can steal their money (merchants in general are not evil and care about reputation). The real problem is giving away full access to your credit card. Someone can steal your CC number from any shop you used it before and then make a purchase. Since CC is so fragile, Visa offers you a chargeback capacity putting merchants under huge risk of fraud. With bitcoin you don't show your whole wallet to anyone. You only make a single transaction to a single address. Merchant cannot possibly leak anything that will give someone ability to spend your money. Instead of spreading your identifying information to 1000s of shops you only keep it in a single place that you control directly (but you should be careful here). So you don't need chargebacks if no one can easily steal your money. To avoid fraud from merchants, people use "reputation" and escrows. Typically, you will be okay to risk paying 3 bucks almost anyone, but you'd pay 300 dollars only to people you already trust (think Apple Store, WalMart etc.) For very rare cases when you need extra security, go to an intermediate escrow service. (E.g. ebay.)

Nursie 13y ago
Umm, no. I exactly want protection from unscrupulous merchants. Stolen CC detail fraud is on the decline thanks to the likes of EMV cards, and I also have legal protection from it via my bank for when that fails. Reputation and escrows are really no equivalent to legal protection from merchant fraud and instant refunds on dispute. We have centuries of history with shysters and scammers (CAVEAT EMPTOR) to show us why this stuff is useful and it's pretty trivial to fake reputation and to fake escrow. >> you'd pay 300 dollars only to people you already trust Nicely cementing the big boys in the market and locking out smaller vendors forever. I'm sorry people feel so affronted by consumer protections and chargeback, but without them I wouldn't buy stuff off the net at all.
- gamechangr 13y ago
  Trust is central to all net purchases. No way around that.
  - socillion 13y ago
    I'd argue that online purchases are so popular precisely because the trust problem has been effectively tackled by Paypal and other processors. If a deal goes bad, you can dispute the payment and probably get your money back. If you're using Liberty Reserve, Bitcoin, Paypal Gift, or anything else like them, your money is gone and there is nothing you can do. Even if this isn't a problem for you, I think Bitcoin will have to solve it in some way to get any widespread adoption. Irreversible transactions are not popular.
    - oleganza 13y ago
      See a couple of my comments around this thread. I think irreversible transactions is precisely what is Bitcoin major selling factor. Many merchants will be able to give you a nice discount and eliminate their headaches. You as a customer will get more stuff, cheaper and with a friendlier look at you (living in Paris I see how merchants detest credit card payments for risks and losses involved).
      - Nursie 13y ago
        Or you as the customer can get ripped off with no recourse, especially as less scrupulous types cotton on to the fact that once they have your money there's nothing much you can do about it.
      - gamechangr 13y ago
        Think of the various ebay scams that exist right now around these issues. For example, I have friends who purchased a zpad (kid Ipad) and had a "no questions asked return policy" for 90 days. They sent it back week two and the Chinese company claims to not receive it until day 92. At least my friend could file a complaint so that others would not fall into the same trap. What kind of recourse would you have with bitcoin?
- oleganza 13y ago
  The risks with CC payments are much higher due to identity theft. Paying with CC online without chargebacks is really dangerous. But paying with BTC is like handing a couple of bucks in cash. Not a big deal. The smallest shops taking small payments can easily earn good reputation and be transparent about how many transactions they processed. So they start with people around them or willing to risk, and then earn better position. When you've done sales for 50K you don't want to steal next 12 bucks to ruin the rest of your life. I don't see how BTC is cementing big boys. On contrary, BTC is liberating all sorts of small shops. Today they bear huge risks with chargebacks and have to go through a lengthy and complicated setup to even start accepting credit cards. Not even saying that PayPal easily freezes accounts from time to time. Bitcoin solves all of that and allows much more people to enter the market and offer some new awesome stuff. (Both online and offline.)
  - Nursie 13y ago
    It harms small shops because people like me won't buy from them without a reversible payment feature.
cube13 13y ago
>With bitcoin you don't show your whole wallet to anyone. You only make a single transaction to a single address. Merchant cannot possibly leak anything that will give someone ability to spend your money. Instead of spreading your identifying information to 1000s of shops you only keep it in a single place that you control directly (but you should be careful here). So you don't need chargebacks if no one can easily steal your money. But your wallet is only as secure as the place it's stored at. If it's on an internet connected machine, you need to make sure that you're as protected as possible. If it's on a third party's server, you need to have faith in their security. Bitcoin wallets are identical to CC numbers in this regard, because if the wallet or CC # is stolen, you can clean out the account. But with Bitcoin, there is no way to undo the damage once everything was taken. If your system gets compromised and your wallet stolen(or the service you're using to store the wallet gets compromised), you're out of luck.
- oleganza 13y ago
  That's all true. Two more things, though: 1. Many big shops like Wal-Mart that you trade with every day can resolve disputes by themselves: they have enough trust of their customers to lose. So when you pay with CC, you make them bear extra risks and costs that you are ultimately paying for in the end. If they give you a convenient and cheaper way to pay them directly and irreversibly, would you choose that option? Same for smaller guys that you happen to trust. Github is not the biggest place on earth, but if it's cheaper for you to pay $12 with BTC instead of $15 with CC, would you trust them not to steal $12 from you? (They cannot steal more than that.) 2. Now, to solve the problem of lousy wallet and forgotten passwords, you may use something like BitcoinPayPal which you trust and store your wallet with them. How is it different from normal PayPal? BitcoinPayPal does not have to charge your CC, so bears no risk of chargebacks. So they can make fees much lower and provide you with "all sales are final" option (see previous paragraph why it's good) or more efficient dispute resolution without taking money from merchant blindly (if PayPal tries to be more merchant-friendly at disputes, you'd simply call Visa to make a chargeback from PayPal itself). This will allow merchant to make a 3-7% discount for you. I myself can see how many shops I trust with irreversible transactions, so I'd prefer paying like that and cheaper. And possibly using 3rd party wallet keeper without dispute resolution (with two-factor auth, of course).

Nursie 13y ago

Umm, no. I exactly want protection from unscrupulous merchants. Stolen CC detail fraud is on the decline thanks to the likes of EMV cards, and I also have legal protection from it via my bank for when that fails. Reputation and escrows are really no equivalent to legal protection from merchant fraud and instant refunds on dispute. We have centuries of history with shysters and scammers (CAVEAT EMPTOR) to show us why this stuff is useful and it's pretty trivial to fake reputation and to fake escrow. >> you'd pay 300 dollars only to people you already trust Nicely cementing the big boys in the market and locking out smaller vendors forever. I'm sorry people feel so affronted by consumer protections and chargeback, but without them I wouldn't buy stuff off the net at all.

gamechangr 13y ago
Trust is central to all net purchases. No way around that.
- socillion 13y ago
  I'd argue that online purchases are so popular precisely because the trust problem has been effectively tackled by Paypal and other processors. If a deal goes bad, you can dispute the payment and probably get your money back. If you're using Liberty Reserve, Bitcoin, Paypal Gift, or anything else like them, your money is gone and there is nothing you can do. Even if this isn't a problem for you, I think Bitcoin will have to solve it in some way to get any widespread adoption. Irreversible transactions are not popular.
  - oleganza 13y ago
    See a couple of my comments around this thread. I think irreversible transactions is precisely what is Bitcoin major selling factor. Many merchants will be able to give you a nice discount and eliminate their headaches. You as a customer will get more stuff, cheaper and with a friendlier look at you (living in Paris I see how merchants detest credit card payments for risks and losses involved).
    - Nursie 13y ago
      Or you as the customer can get ripped off with no recourse, especially as less scrupulous types cotton on to the fact that once they have your money there's nothing much you can do about it.
    - gamechangr 13y ago
      Think of the various ebay scams that exist right now around these issues. For example, I have friends who purchased a zpad (kid Ipad) and had a "no questions asked return policy" for 90 days. They sent it back week two and the Chinese company claims to not receive it until day 92. At least my friend could file a complaint so that others would not fall into the same trap. What kind of recourse would you have with bitcoin?
oleganza 13y ago
The risks with CC payments are much higher due to identity theft. Paying with CC online without chargebacks is really dangerous. But paying with BTC is like handing a couple of bucks in cash. Not a big deal. The smallest shops taking small payments can easily earn good reputation and be transparent about how many transactions they processed. So they start with people around them or willing to risk, and then earn better position. When you've done sales for 50K you don't want to steal next 12 bucks to ruin the rest of your life. I don't see how BTC is cementing big boys. On contrary, BTC is liberating all sorts of small shops. Today they bear huge risks with chargebacks and have to go through a lengthy and complicated setup to even start accepting credit cards. Not even saying that PayPal easily freezes accounts from time to time. Bitcoin solves all of that and allows much more people to enter the market and offer some new awesome stuff. (Both online and offline.)
- Nursie 13y ago
  It harms small shops because people like me won't buy from them without a reversible payment feature.

cube13 13y ago

>With bitcoin you don't show your whole wallet to anyone. You only make a single transaction to a single address. Merchant cannot possibly leak anything that will give someone ability to spend your money. Instead of spreading your identifying information to 1000s of shops you only keep it in a single place that you control directly (but you should be careful here). So you don't need chargebacks if no one can easily steal your money. But your wallet is only as secure as the place it's stored at. If it's on an internet connected machine, you need to make sure that you're as protected as possible. If it's on a third party's server, you need to have faith in their security. Bitcoin wallets are identical to CC numbers in this regard, because if the wallet or CC # is stolen, you can clean out the account. But with Bitcoin, there is no way to undo the damage once everything was taken. If your system gets compromised and your wallet stolen(or the service you're using to store the wallet gets compromised), you're out of luck.

oleganza 13y ago
That's all true. Two more things, though: 1. Many big shops like Wal-Mart that you trade with every day can resolve disputes by themselves: they have enough trust of their customers to lose. So when you pay with CC, you make them bear extra risks and costs that you are ultimately paying for in the end. If they give you a convenient and cheaper way to pay them directly and irreversibly, would you choose that option? Same for smaller guys that you happen to trust. Github is not the biggest place on earth, but if it's cheaper for you to pay $12 with BTC instead of $15 with CC, would you trust them not to steal $12 from you? (They cannot steal more than that.) 2. Now, to solve the problem of lousy wallet and forgotten passwords, you may use something like BitcoinPayPal which you trust and store your wallet with them. How is it different from normal PayPal? BitcoinPayPal does not have to charge your CC, so bears no risk of chargebacks. So they can make fees much lower and provide you with "all sales are final" option (see previous paragraph why it's good) or more efficient dispute resolution without taking money from merchant blindly (if PayPal tries to be more merchant-friendly at disputes, you'd simply call Visa to make a chargeback from PayPal itself). This will allow merchant to make a 3-7% discount for you. I myself can see how many shops I trust with irreversible transactions, so I'd prefer paying like that and cheaper. And possibly using 3rd party wallet keeper without dispute resolution (with two-factor auth, of course).