9 ms·

Confirms for me that Bitcoin is on track to disrupt credit card payments, possibly ACH/Wire, and not to be a replacement currency. Credit cards handle about 3.

• pjc50 12y ago
  .. and how much does Coinbase charge in fees and order spread? How do they make their money in this environment?
  • EC1 12y ago
    Their business model runs exclusively on draining the accounts of people that forgot their wallet keys!
• boling11 12y ago
  Plenty of reasons for merchants to accept BTC, still not a lot of reasons for consumers..
  • CyberDildonics 12y ago
    Have you ever had your credit card stolen? Have you ever had it frozen and not been able to spend your own money? These things happen constantly but never happen when paying with bitcoin. The more you have to deal with banks the more of a breathe of fresh air it is to pay in btc. Credit card fraud is incredibly rampant and the security measures in place by banks and sites is so over the top it becomes difficult to even use them. Use ghostery? Your transaction won't go through with an unknown error. Use a VPN? Your transaction won't go through with an unknown error. Paying from a different computer? A different IP? Using a different address? All these things are a recipe for being on hold with your bank for 45 minutes when you all you wanted to do was order $50 of stuff from NewEgg.
    • gst 12y ago
      I use my credit card a lot for all sorts of things. In the past 3 years I can only remember my card being rejected once. An when this happened I immediately got an automated call that allowed me to confirm my transaction (so I was still able to use that card to pay). My card was also stolen once (someone copied the magnetic stripe). Once this someone did a transaction on the other side of the country I immediatelly got a call from Amex which proceed to refund that transaction and to send me a new card. IIRC a replacement card arrived in the mail on the next day. In the mean time I just used my debit card to pay for things.
    • hurin 12y ago
      You obviously have no idea what you're talking about. The consumer isn't responsible for Credit Card fraud - if it's stolen my bank reimburses me for transactions I did not commit. If bitcoins are stolen you get what? Specifically the lack of fraud protection is obviously advantageous for merchants (who often are the ones, not the banks, paying out in the case of fraud) but for the consumer its distinctly worse.
      • knocte 12y ago
        Bitcoins can't be stolen. Period. A different thing is that you may suck at protecting your operating system.
        • sukilot 12y ago
          As a percentage of total money supply, mtgox was the biggest theft (or loss, there is no differene to victims) of currency in modern history.
          • knocte 12y ago
            Mtgox != Bitcoin For all intents and purposes, people having money in mtgox was the equivalent of people holding money in a crappy (security or fraud-wise) bank.
  • mnisjk2 12y ago
    Exactly. I still use plastic even when btc is an option. Credit cards are simply better for the consumer (instantaneous transaction, chargeback/dispute and points)
    • eblanshey 12y ago
      The NFC-enabled bitcoin wallets are coming. It won't get easier than that.
      • etchalon 12y ago
        I believe they're already here. And it will get easier than that. It's called Apple Pay.
        • tonyhb 12y ago
          Guess what was already here? Bitcoin NFC and Google Wallet.
          • etchalon 12y ago
            …yeah that's what I was saying. Other than the last part, which was meant as, "Apply Pay is easier to use than Bitcoin." Cause man, it is.
    • knocte 12y ago
      >Credit cards are simply better for the consumer This suggests you haven't tried paying with bitcoin. Sure, you lose all those things you get with creditcards, but for me some advantages that bitcoin offers over credit cards (and yes I'm a consumer too) are more important, such us: - I'm not afraid that any of the providers where I have bought things gets hacked, because my identity and payment details is not kept by them. - Paying with bitcoin is so much easier, I don't need to copy stupid numbers from a card with my keyboard ever again. - I don't need to check my bank account from time to time to see if I had charges that don't correspond to things I didn't buy. - I'm not afraid of bank commissions that especially take place when I pay for things abroad. These are the little things that will make a universal-worldwide-digital-coin succeed. Could be that this coin is bitcoin, or other one.
• thejosh 12y ago
  3% for very low volume maybe. Get a little bit of volume and you'll get less than 0.7%.
  • aianus 12y ago
    How is that possible given that my credit card gives 1% cash back?
    • anon1385 12y ago
      A lot of people don't pay off their cards on time?
      • eric_h 12y ago
        The average american has 15k in credit card debt[1] 1) http://money.cnn.com/magazines/moneymag/money101/lesson9/ http://money.cnn.com/magazines/moneymag/money101/lesson9/
    • zminjie 12y ago
      they bank on you not paying the full balance every month so the interest alone will more than pay for your cash back.
      • etchalon 12y ago
        That and the fees they collect from the merchants.
  • deleted 12y ago
    [deleted]
  • runeks 12y ago
    That depends on what you're selling. If your store sells "high risk" items (I know electronics are a high risk item, and adult content as well), the fee can exceed 3%, as I understand it.
• etchalon 12y ago
  Why do people keeping talking about BTC replacing credit card payments? BTC does not offer credit. It might replace debit cards (BIG might), but credit cards exist for a reason.
  • aianus 12y ago
    I think most people use credit cards for convenience/points not because they're so broke they need to borrow money to buy a Big Mac.
    • dustcoin 12y ago
      Less than 50% of Americans always pay their full balance, around 33% usually or always carry a balance. http://www.gallup.com/poll/168668/americans-rely-less-credit-cards-previous-years.aspx http://www.gallup.com/poll/168668/americans-rely-less-credit...
    • etchalon 12y ago
      Most people use credit cards for cash flow management. They carry a balance, but make payments.
  • brighton36 12y ago
    I wrote an article on this, scroll on down to "The Solution" http://cointelegraph.com/news/113255/keeping-score-at-the-2014-bitcoin-bowl http://cointelegraph.com/news/113255/keeping-score-at-the-20...
• rhino369 12y ago
  Bitcoin just pushes the costs onto the consumer. In order to replicate the credit card payment process you have: prebuy bitcoins. Not only is this a bitch to deal with, but it costs money. Transaction fees, hidden or not. Sure you can buy on an exchange but that has a small fee plus the risk they'll steal or lose your coins. Buying from an ATM or broker has a fee. Even if it isn't explicit they'll get you on exchange rate spread. Some sort of escrow service. If Amazon doesn't ship me my TV, I can cancel the charge on Visa. Either you forgo this or you pay for it. This will have a fee. There is volatility risk. Then the merchant still has some fees. They have to pay Coinbase their fee. When accounting for all the risk I doubt it's cheaper. That isn't even considering that confirmation time is like what? 10-30 minutes? Bitcoin will be the silk road currency but not much else.
  • IkmoIkmo 12y ago
    You can buy bitcoins at Circle for free. And sell, too, at the same price. No spread obviously (as that would mean you can arbitrage, as their buy and sell price are exactly the same). Volatility risk is inherent to every single currency. The swiss franc just had a 30% change in value. Bitcoin's volatility is going down every year, look at the charts, and it makes sense, too. Deeper markets are harder to move. There's nothing particularly unique about bitcoin that makes it volatile except its youth and nascent ecosystem. Over time its predictable supply curve makes it less volatile than most of the world's currencies for most of the world's population that don't live in stable OECD economies with decent currencies. There are numerous countries with 10-20% inflation and wild swings. Is bitcoin any better? Well again, its volatility is going down every year. But already you can go to Bitreserve and lock in the price to a dollar or euro or gold or yen or whatever value. So if you're in Kenya, instead of 10% inflation, you just keep your money according to the dollar rate if you want, enabled by bitcoin. Merchant fee? Bitpay offers 0% processing for all. Their most recent merchant taking bitcoin through Bitpay (at 0% fees) was Microsoft. Transactions are instant, confirmation time can be mitigated as it's a function of risk. Cup of coffee needs no confirmation time. Amazon needs no confirmation time. (if the customer double spends it, you simply cancel 15 minutes later and the item supposed to ship the next day won't arrive.) Xbox Live needs no confirmation time. (account gets shut down after 10 minutes of trying to set up a multiplayer game of Halo, xbox gets fingerprinted and it and the ip gets blacklisted for fraud. Remember only the owner of bitcoin can double spend through careful effort, meaning you can be near certain fraud was intentional.) In short, virtually all of online retail has no real confirmation issues long term. And software solutions are in progress, there was one posted just last week, can't find it atm. Escrow: it's just an insurance service, no reason there won't be a company offering it. In fact escrow with timelocks and multi-sig already exist. It's a bit of a long discussion but look into Mike Hearn's presentations and articles on this, the short story is that with bitcoin you can get much better and fairer and more specific expert escrow services to fit your particular niche. Paypal and Amazon's systems aren't adequate and allow too much fraud and require too many costs. Whether the customer or the merchant pays isn't relevant, the customer ALWAYS pays, it's not like the merchant will pay extra fees from his money-tree in his backyard. The customer pays. So if you have an expensive escrow system that screws over merchants and lets criminals chargeback lots of transactions stealing products essentially without paying and the merchant has to pay for expensive processes to get their product/money back, or let it slide, then the company will raise prices to make up for the losses or go out of business. Customers pay. Same with creditcard theft. Oh you don't have to pay if your CC gets stolen and someone spends $1k of your money? You still pay. Mastercard isn't giving you $1k. They're either taking it from the merchant (see above), or they're paying you money out of revenues. Surprise, in both cases, you're the source of revenue. Banking isn't cheap, there are enough articles on this online just check 'm out. A checking account averages about $200 a year? Credit is hugely overpriced? Paying 15-20% a year on credit when if I put money in a savings account I can barely get 0.5%? That's obviously because there's no peer-to-peer lending, if there was you'd both pay/get 10% and be better off by 10%. But people accept crazy rates on creditcards, why? Because the regular use is free or insured or promoted. All of those things you think are 'free' or 'cheap' are only such because you're getting screwed in other areas of your financial services. In short, creditcards are a 1950s invention that are hugely unsecure: people walk around with plastic cards with their freaking entire password (doubles as an account number) printed on it. And everytime you want to pay, you show your password. It's insane. And then if something goes wrong, you charge it back. All of this costs money, there's a ton of theft and fraud with this system and the customer ends up paying for it. You're deluding yourself if you think that's cheap, it's like getting a free razor and being oblivious to the fact you're paying a shit ton on the blades.