9 ms·
The 1st order effects are on business. It's mostly the 2nd order effects that consumers feel. Marginally higher costs that inevitably pass to consumers . Merch
by netcan 13y ago
The 1st order effects are on business. It's mostly the 2nd order effects that consumers feel. Marginally higher costs that inevitably pass to consumers . Merchant refusal to ship to "high risk" locations. More difficult international transactions generally. Fewer online vendors (=less choice & higher prices) of high risk (easily resellable) items.
Then there are the effects of having such a thick intermediary, a duopoly. Some consumers can't get a credit card. It's hard for consumers vulnerable to overspending & borrowing to avoid the card's expensive credit component.
There's also a general brokenness (IMO) of the "pull" nature of credit cards. I want to send vendors money, not authorize them to take some themselves while reserving the right to dispute the charge. Even for recurring transactions I would rather an easy bill paying service that works like invoices & checks do, but with a 10X simpler UI.
- deleted 13y ago[deleted]
- wdewind 13y ago> Marginally higher costs that inevitably pass to consumers Massive statement that I sincerely doubt is true (increased revenue off of increased liquidity drives prices down for everyone).
- netcan 13y agoI don't understand this statement. It's controversial that an extra cost attached to every transaction in a big wide chunk of the economy will bring up costs to consumers. It's not very different to sales tax.
- wdewind 13y agoNo, it's completely different from sales tax because while the company will have slightly increased costs (usually ~2.5%), they will also move significantly more inventory which will allow quicker reinvestment cycles, and thus more growth. This is the value of credit/debt in general: assuming everyone trusts everyone else transaction volume can greatly increase. And that trust comes from the credit card companies.
- runeks 13y agoI think the point is that if we can replace credit cards with a no-fee payment method, merchants will save 3% on every transaction. Of course, it has to be as easy for the consumer as credit cards (which I think Bitcoin can become).
- wdewind 13y agoNo, the point is that credit cards give people a line of credit, which increases overall liquidity. People buy things on credit cards they wouldn't otherwise be able to. When they buy that thing on a credit card, the company selling that thing gets the money earlier, and can thus take it and buy more from their suppliers and so on and so forth. Bitcoin removes overall liquidity, by behaving like cash. The merchant may save 3% on bitcoin transactions, but they will have fewer transactions.
- deleted 13y ago[deleted]
- bdcs 13y agoIf "high risk" == high rate of chargebacks, then bitcoin will fix that.
- baddox 13y agoWhat other risk could there be to the seller?
- voxic11 13y agoNo bitcoin will fix that because you can't reverse the charges. So there is no risk in shipping because you are 100% positive that you have the money you expect you have.
- grey-area 13y agoSo there is no risk in shipping because you are 100% positive that you have the money you expect you have. Only if you wait for a significant amount of time (days?) to verify the transaction. If you use a payment processor and they allow you to pass through transactions without verification, they are assuming that risk for you, but the risk is still there, and there is of course also risk caused by the currency volatility, chance of theft or loss of coins (very different from digital cash, more like paper cash), etc. I'd be interested to know how companies like bitpay hedge that risk, or the risks caused by Bitcoin volatility, if indeed they do.
- kalleboo 13y ago> Some consumers can't get a credit card. It's hard for consumers vulnerable to overspending & borrowing to avoid the card's expensive credit component. Aren't debit and credit cards 100% interchangeable these days? I've for sure never had my MasterCard debit card rejected.
- aestra 13y agoGuess what? 10 million American households are unbanked or underbanked. [1] http://en.wikipedia.org/wiki/Unbanked http://en.wikipedia.org/wiki/Unbanked
- Tossrock 13y agoI don't think those 10 million households are going to have their problems solved by bitcoin.
- jdh 13y agoMaybe not in the next few years. But people who pay with cash because they aren't allowed to be in this country and don't want a bank account (some portion of the unbanked) might enjoy shopping in the digital world by using some "digital cash".
- cstejerean 13y agoThey can already shop in the digital world with prepaid Visa, Master Card or even AmEx cards. Going after people without bank accounts is big business.
- aestra 13y agoCan they? I tried to order something online with a prepaid debit card once and it was rejected. I then put in my CC and it worked fine. Disclaimer: My experiences don't necessarily reflect others.
- seabee 13y ago