Flat fee payment processing with BitPay | Page 2 | TigerDroppings.com

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Volvagia
LSU Fan
Baton Rouge
Member since Mar 2006
41214 posts

re: Flat fee payment processing with BitPay


Gotchya.


Seems a negligible difference though.






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WikiTiger
LSU Fan
Member since Sep 2007
40721 posts

re: Flat fee payment processing with BitPay


quote:

Seems a negligible difference though.


it is. no doubt.

and certainly the volume of bitcoin payers at this point is so small that it makes this discussion more of a philosophical one than a reality based one.

but i think it's very interesting. some disruption in this industry is desperately needed.

there is no reason that a business should be paying 3% or more plus a $0.10 to $0.15 per swipe fee to simply perform a transaction. (this is no jab at Square which at least seems to be attempting to disrupt this space, but rather at the traditional model that companies like Visa/MasterCard use)






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LSURussian
LSU Fan
Baton Rouge
Member since Feb 2005
84358 posts

re: Flat fee payment processing with BitPay


quote:

Please explain like I'm 5 how they can do this successfully.

With the various btc prices available, this provider can buy btc at the lowest prices available on exchanges and sell at the exchanges with the highest prices.

Or even worse, it will just set its own buy/sell prices with a big spread and can make a ton of profit doing that just because btc trading is so inefficient there is no universally accepted conversion rate.

Simple enough for you?






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LSURussian
LSU Fan
Baton Rouge
Member since Feb 2005
84358 posts

re: Flat fee payment processing with BitPay


quote:

there is no reason that a business should be paying 3% or more plus a $0.10 to $0.15 per swipe fee to simply perform a transaction. (
As a free market person, shouldn't you be setting up your own credit card system with lower fees if the existing card providers are being so greedy?






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Broke
LSU Fan
AKA Buttercup
Member since Sep 2006
57257 posts

re: Flat fee payment processing with BitPay


quote:

Or even worse, it will just set its own buy/sell prices with a big spread and can make a ton of profit doing that just because btc trading is so inefficient there is no universally accepted conversion rate


So do you think it's going to happen as I say it's going to happen? Yes or no.






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WikiTiger
LSU Fan
Member since Sep 2007
40721 posts

re: Flat fee payment processing with BitPay


quote:

So do you think it's going to happen as I say it's going to happen? Yes or no.


So, what you argue is that they will buy bitcoins low and sell them high. Ok, fine, I can see them having a goal to do that.

But I still don't see how this impacts their service or their customers in any way.

Once again, I will explain how it works:

You sell a widget online for $5. A customer pays the equivalent in bitcoins. BitPay processes the transaction and gives you $5 US dollars.

What's the problem? Are you arguing that customers are too stupid to know what $5 in bitcoins should be and that they'll get ripped off?








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Broke
LSU Fan
AKA Buttercup
Member since Sep 2006
57257 posts

re: Flat fee payment processing with BitPay


quote:

BitPay processes the transaction and gives you $5 US dollars


Except they peg the conversion to whatever rate they want. Hence, getting a few extra bitcoin in the process, many times over. Money






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WikiTiger
LSU Fan
Member since Sep 2007
40721 posts

re: Flat fee payment processing with BitPay


quote:

Except they peg the conversion to whatever rate they want. Hence, getting a few extra bitcoin in the process, many times over. Money


So you're saying that they are ripping off the people making the purchases and that they are too stupid to know whether or not BitPay's quoted price in bitcoins is fair?



This post was edited on 10/8 at 9:30 am


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Broke
LSU Fan
AKA Buttercup
Member since Sep 2006
57257 posts

re: Flat fee payment processing with BitPay


quote:

So you're saying that they are ripping off the people making the purchases and that they are too stupid to know whether or not BitPay's quoted price in bitcoins is fair?


More than likely the merchant while they do the conversion. Really either way could benefit them. I have no idea how this business will operate but not having a standarized exchange for conversion will open it up to things like we've stated.






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Broke
LSU Fan
AKA Buttercup
Member since Sep 2006
57257 posts

re: Flat fee payment processing with BitPay


Also I did read this:

quote:

BitPay guarantees the exchange rate during the checkout process using our Bitcoin Best Bid (BBB) rate calculation from multiple exchanges.


This could be good or bad. I wonder if they will allow the rate calculation to be known. Also which exchanges they will use in the calculation.






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WikiTiger
LSU Fan
Member since Sep 2007
40721 posts

re: Flat fee payment processing with BitPay


quote:

More than likely the merchant while they do the conversion. Really either way could benefit them. I have no idea how this business will operate but not having a standarized exchange for conversion will open it up to things like we've stated.


I'll post this again since you seem to have not read it and insist on posting wild speculation and accusations based not on facts or evidence.

https://bitpay.com/bitcoin-exchange-rates

quote:

Bitcoin Best Bid (BBB) Exchange Rates
BitPay consolidates market depth from multiple exchanges to provide buyers with a bitcoin best bid (BBB) exchange rate. BitPay currently calculates BBB based on Bitcoin/US Dollar rates because of the maximum liquidity.

To calculate the exchange rate for US Dollars, we pull the market depth from exchanges with adequate liquidity and withdrawal capability in USA and the Eurozone. The exchange order books are merged into a Consolidated Level II table.

The BBB is calculated by simulating an auto-routing market sell order, across all exchanges, with zero commission fees. Buyers will always get a better value by spending their bitcoins at a BitPay merchant than by selling them on an exchange.

To calculate the exchange rate for currencies other than the US Dollar, we use the USD rate described above and multiply it by the daily ECB ForEx rates compared to the US Dollar.



This post was edited on 10/8 at 9:39 am


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WikiTiger
LSU Fan
Member since Sep 2007
40721 posts

re: Flat fee payment processing with BitPay


quote:

More than likely the merchant while they do the conversion. Really either way could benefit them. I have no idea how this business will operate but not having a standarized exchange for conversion will open it up to things like we've stated.


So you argue that they are going to grow their business by salami slicing their customers and their customers' customers?






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Broke
LSU Fan
AKA Buttercup
Member since Sep 2006
57257 posts

re: Flat fee payment processing with BitPay


See above for more wild speculation on what amounts to a speculative form of errrr "currency"








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Broke
LSU Fan
AKA Buttercup
Member since Sep 2006
57257 posts

re: Flat fee payment processing with BitPay


quote:

So you argue that they are going to grow their business by salami slicing their customers and their customers' customers?


You act like this hasn't been done before. On legitimate exchanges. Is that your position here?






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WikiTiger
LSU Fan
Member since Sep 2007
40721 posts

re: Flat fee payment processing with BitPay


quote:

You act like this hasn't been done before. On legitimate exchanges. Is that your position here?


I just think your accusations lack merit. Not only that, but you are essentially claiming the business to be extremely short-sighted.

If $5 equals .04 bitcoins and BitPay quotes a price of .042 bitcoins, well, people aren't stupid. They will pick up on these things, especially if it's a standard practice.

Not only that, but BiyPay's customers (the merchants selling these products) would get pissed off too because it would deter their customers from making purchases, and the merchants might take their business elsewhere, like to Coinbase which offers a similar service.



This post was edited on 10/8 at 9:48 am


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Broke
LSU Fan
AKA Buttercup
Member since Sep 2006
57257 posts

re: Flat fee payment processing with BitPay


How many decimal places did you say they could go out to on bitcoin? You don't think they will slip it in somehow? Because at 5000 business accounts earning them 1.5 million a year, no fricking way I think they get that many customers, but process them for what amounts to nothing.





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Broke
LSU Fan
AKA Buttercup
Member since Sep 2006
57257 posts

re: Flat fee payment processing with BitPay


And I'm done with this conversation now.





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fasdit
Member since Mar 2011
29 posts

re: Flat fee payment processing with BitPay


quote:

WikiTiger
If $5 equals .04 bitcoins and BitPay quotes a price of .042 bitcoins, well, people aren't stupid. They will pick up on these things, especially if it's a standard practice.


I can envision a possible scenario where BitPay is the only payment link between the merchant's products and the consumer. In this situation the merchant could potentially lose sales if a consumer realizes that they will always be overcharged when making a purchase with BitPay. In order to recover sales the merchant would have to reduce their prices enough to bring the $0.042 BitPay price back down to $0.040.

Cross multiply and we see.
[x USD/0.04 BTC]=[5 USD/0.042]
x = 4.76 USD!

So if BitPay increases their spread from 0.04 to 0.042, then a merchant would have to reduce their $5 item to a $4.76 item to bring the bitcoin price back down to the real exchange rate of 5USD/0.04BTC!

That isn't necessarily a lot of money in this example, but now we are moving closer to a "fee" that rivals the 3% per transaction of traditional credit cards. 3% of $5 is $0.15. So it would actually be less expensive for the merchant to use a credit card with those example number you posted.

Assuming there are not many competitors offering the same service as BitPay they would be free to jack up their spread more and this would diminish the savings that the merchant would realize. If the spread increased enough then the overall loss in revenue to the merchant from having to set prices lower would equal what they would lose with higher prices on the same item and eating a transaction fee.



This post was edited on 10/8 at 11:10 pm


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fasdit
Member since Mar 2011
29 posts

re: Flat fee payment processing with BitPay


I'm not suggesting that they would necessarily jack their spread that high though. I mean, if they want to compete with traditional electronic transactions on only the basis of cost (and not anonymity!) then it would be in their best interest to set their spread so that it would always translate to a lower cost than credit cards.


This post was edited on 10/8 at 11:13 pm


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WikiTiger
LSU Fan
Member since Sep 2007
40721 posts

re: Flat fee payment processing with BitPay


quote:

Assuming there are not many competitors offering the same service as BitPay


There are 3 well known ones operating right now: BitPay, Coinbase, and BIPS, but BIPS just concentrates on Europe I believe, whereas the others operate globally.


And my argument is that it would just plain be very stupid for companies like BitPay to do this kind of stuff. And I think it would be noticed very quickly and the community would not respond positively.



This post was edited on 10/8 at 11:38 pm


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