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Can't there exist a company that accepts Bitcoin transactions on behalf of clients (shops) and guarantees them? Even if a transaction fails, the company coughs

Can't there exist a company that accepts Bitcoin transactions on behalf of clients (shops) and guarantees them? Even if a transaction fails, the company coughs up, and to make ends meet they charge a small per-transaction fee. Even without this, it's quite possible that bad bitcoin transactions will be far less costly to shops on average. If a shop sells a coffee for $2 paid for by a bad bitcoin transaction, the shop seller has made around a 50c loss (stock mainly). If a shop sells a coffee for $2 paid for by a later charge backed credit card transaction, the shop seller is charged $15[1], plus the 50c stock loss for a net $15.50 loss! You'd have to have over 30 bad bitcoin transactions to equal that level of loss. Chargebacks are a money making operation by the credit card companies, at the expense of merchants. Bitcoin helps a lot. [1] https://stripe.com/help/disputes https://stripe.com/help/disputes

dragontamer 13y ago
Why would a consumer put up with such a company? You've got the economics backwards. Consumers want features such as reversibility of transactions, money back guarantees, and reward points. Credit Card companies offer _customers_ rights, not the business. Businesses put up with credit card companies because it brings them additional business. If you want to create a pro-business "transaction framework", go on ahead. (indeed, the Apple Store does this. All restrictions are strictly for pro-Apple reasons). But consumers are only willing to put up with so many pro-business storefronts.
- ISL 13y ago
  Some consumers would rather have lower prices and happier merchants than rewards points. I'd much rather pay for my coffee in digital cash than pay an extra 2%+ to facilitate the transaction. If the product is poor, I just won't buy it again. Same goes for lunch, etc. Cards that return ~1% back highlight a problem; the transaction fees are too high. $0.10/bitcoin transaction [1] is also steep for minor transactions. If it were more like $0.01, tiny transactions might take off... Chargeback/escrow services/guarantees are appropriate when the money involved isn't small in relevant units. [1] https://en.bitcoin.it/wiki/Transaction_fees https://en.bitcoin.it/wiki/Transaction_fees
  - marcell 13y ago
    FYI, default minimum transaction fee is 0.0001 BTC in current version, or about $0.01.
    - ISL 13y ago
      Whoops! My arithmetic error. I'd computed it, but transcribed 0.0001 to 0.001 BTC in my head last night. Mea Culpa.
  - dragontamer 13y ago
    What lower prices? I pay off my credit card every month, and therefore pay nothing ever. Reward points are icing on the cake, all of these are pulled out from Merchant transaction fees. Have you ever looked at what you're paying for in a credit card? Basically nothing. The merchant pays for everything. (occasionally, the merchant passes back the savings to you... like the occasional gas station that doesn't take credit cards, or a store that only accepts credit cards on purchases over $5) Consumers pay damn near nothing on credit cards. That is why they use them.
    - eru 13y ago
      Of course, the merchant fees are included in the prices.
nazgulnarsil 13y ago
Mtgox is aiming to do this. That way if you both have mtgox accounts its just a database update.

dragontamer 13y ago

Why would a consumer put up with such a company? You've got the economics backwards. Consumers want features such as reversibility of transactions, money back guarantees, and reward points. Credit Card companies offer _customers_ rights, not the business. Businesses put up with credit card companies because it brings them additional business. If you want to create a pro-business "transaction framework", go on ahead. (indeed, the Apple Store does this. All restrictions are strictly for pro-Apple reasons). But consumers are only willing to put up with so many pro-business storefronts.

ISL 13y ago
Some consumers would rather have lower prices and happier merchants than rewards points. I'd much rather pay for my coffee in digital cash than pay an extra 2%+ to facilitate the transaction. If the product is poor, I just won't buy it again. Same goes for lunch, etc. Cards that return ~1% back highlight a problem; the transaction fees are too high. $0.10/bitcoin transaction [1] is also steep for minor transactions. If it were more like $0.01, tiny transactions might take off... Chargeback/escrow services/guarantees are appropriate when the money involved isn't small in relevant units. [1] https://en.bitcoin.it/wiki/Transaction_fees https://en.bitcoin.it/wiki/Transaction_fees
- marcell 13y ago
  FYI, default minimum transaction fee is 0.0001 BTC in current version, or about $0.01.
  - ISL 13y ago
    Whoops! My arithmetic error. I'd computed it, but transcribed 0.0001 to 0.001 BTC in my head last night. Mea Culpa.
- dragontamer 13y ago
  What lower prices? I pay off my credit card every month, and therefore pay nothing ever. Reward points are icing on the cake, all of these are pulled out from Merchant transaction fees. Have you ever looked at what you're paying for in a credit card? Basically nothing. The merchant pays for everything. (occasionally, the merchant passes back the savings to you... like the occasional gas station that doesn't take credit cards, or a store that only accepts credit cards on purchases over $5) Consumers pay damn near nothing on credit cards. That is why they use them.
  - eru 13y ago
    Of course, the merchant fees are included in the prices.

nazgulnarsil 13y ago

Mtgox is aiming to do this. That way if you both have mtgox accounts its just a database update.