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re: BitPay Bitcoin processing fees vs. PayPal and Rewards Cards
Posted on 4/15/13 at 9:53 pm to WikiTiger
Posted on 4/15/13 at 9:53 pm to WikiTiger
quote:
In other words, if you sell an item for $5.00 and the user pays in bitcoins then you will get $5.00 (minus the fee) regardless of what the bitcoin exchange rate is that day.
Wait, does this mean BitPay is absorbing the exchange risk for merchants? They're insane if that's what they are doing.
1
Posted on 4/15/13 at 9:55 pm to ZereauxSum
quote:
Wait, does this mean BitPay is absorbing the exchange risk for merchants? They're insane if that's what they are doing.
I don't know the details of how they handle that as that's probably a company secret, however, I do not believe they are holding many bitcoins. I'm pretty sure they sell them on the market at the time they accept them.
Posted on 4/15/13 at 9:59 pm to WikiTiger
A couple of nits to pick here.
First off, the "fraud risk" rating is completely unsupported. Where do they come up with "high" ratings for Paypal and Visa/MC?
The other thing is that this 1% rate is no doubt a loss leader. Like it or not, it takes a reasonable investment of time for non-techie merchants to get into accepting bitcoin payments, managing bitcoin cashflow, etc. Bitcoin is still going to struggle here b/c the number of those who will offer bitcoins is still tiny and it takes extra work to get plugged into that way of doing business that really isn't necessary.
But IMHO the biggest problem here is that vendors would have to be able to offer substantial discounts to bitcoin users for it to be worth the trouble for most buyers. I will claim without proof that 2% off isn't enough.
First off, the "fraud risk" rating is completely unsupported. Where do they come up with "high" ratings for Paypal and Visa/MC?
The other thing is that this 1% rate is no doubt a loss leader. Like it or not, it takes a reasonable investment of time for non-techie merchants to get into accepting bitcoin payments, managing bitcoin cashflow, etc. Bitcoin is still going to struggle here b/c the number of those who will offer bitcoins is still tiny and it takes extra work to get plugged into that way of doing business that really isn't necessary.
But IMHO the biggest problem here is that vendors would have to be able to offer substantial discounts to bitcoin users for it to be worth the trouble for most buyers. I will claim without proof that 2% off isn't enough.
Posted on 4/15/13 at 10:00 pm to WikiTiger
So unless you want the fraud risk, you have to wait about an hour for the transaction to go through. Unlike credit cards, bitcoin is anonymous so there is no way to track fraud.
Posted on 4/15/13 at 10:01 pm to WikiTiger
quote:
In other words, if you sell an item for $5.00 and the user pays in bitcoins then you will get $5.00 (minus the fee) regardless of what the bitcoin exchange rate is that day.
BTC has lost $7 in the last hour. If it takes 1 hour to confirm, who takes this loss?
Posted on 4/15/13 at 10:01 pm to WikiTiger
Keep up the good fight, Wiki.
BTC may not be a success in the end, but it very well could be the game changer that redefines how we buy and sell goods.
From an innovation standpoint, BTC is pushing boundaries that will force companies to reconsider the way they do business.
I am all for innovation and I think the retail is experience is in for an overhaul between crypto-currency, showrooming, and improved delivery speeds.
BTC may not be a success in the end, but it very well could be the game changer that redefines how we buy and sell goods.
From an innovation standpoint, BTC is pushing boundaries that will force companies to reconsider the way they do business.
I am all for innovation and I think the retail is experience is in for an overhaul between crypto-currency, showrooming, and improved delivery speeds.
This post was edited on 4/15/13 at 10:08 pm
Posted on 4/15/13 at 10:03 pm to foshizzle
quote:
First off, the "fraud risk" rating is completely unsupported. Where do they come up with "high" ratings for Paypal and Visa/MC?
one of many reports on this: Merchants in the United States are losing approximately $190 billion a year to credit card fraud – much of it online, according to a 2009 Lexis Nexis study – The True Cost of Fraud. Banks lose $11 billion and customers loses about 4.8 billion, so merchants lose almost twenty times as much as banks.
quote:
The other thing is that this 1% rate is no doubt a loss leader. Like it or not, it takes a reasonable investment of time for non-techie merchants to get into accepting bitcoin payments, managing bitcoin cashflow, etc. Bitcoin is still going to struggle here b/c the number of those who will offer bitcoins is still tiny and it takes extra work to get plugged into that way of doing business that really isn't necessary.
I don't get what you are saying. BitPay handles everything. It takes about 30 minutes to add their code snippet to your web site and to provide them with a routing number and account number for their direct deposit.
quote:
But IMHO the biggest problem here is that vendors would have to be able to offer substantial discounts to bitcoin users for it to be worth the trouble for most buyers.
Right now bitcoin doesn't have many users. I grant you that. But the economy is growing.
Also, let's not forget that bitcoin opens up wayyyy more markets than PayPal or credit cards allow. That was one of the main reasons WordPress started accepting bitcoins, because it can be used from any country. Credit cards and PayPal can not.
Posted on 4/15/13 at 10:05 pm to lynxcat
quote:
BTC may not be a success in the end, but it very weel could be the game changer that redefines how we buy and sell goods.
From an innovation standpoint, BTC is pushing boundaries that will force companies to reconsider the way they do business.
I am all for innovation and I think the retail is experience is in for an overhaul between crypto-currency, showrooming, and improved delivery speeds.
Man, I'm glad someone sees the big picture around here. I was beginning to think I was alone.
Posted on 4/15/13 at 10:05 pm to WikiTiger
quote:
I'm pretty sure they sell them on the market at the time they accept them.
Im really sleepy right now so maybe it's not as big a deal as I'm thinking, but I had a scenario in my head where a customer pays me (the merchant) $5 worth of bitcoins, BitPay gives me $5 and turns around to sell my BC on the market but only gets $4.
Posted on 4/15/13 at 10:07 pm to WikiTiger
quote:
But the economy is growing.
I seriously doubt that in light of the events of the past 10 days.
BTC is now at $67, down from $97 12 hours ago.
Posted on 4/15/13 at 10:07 pm to ZereauxSum
quote:
Im really sleepy right now so maybe it's not as big a deal as I'm thinking, but I had a scenario in my head where a customer pays me (the merchant) $5 worth of bitcoins, BitPay gives me $5 and turns around to sell my BC on the market but only gets $4.
Like I said, I don't know how they do it, but I can't imagine they'd be in business long if that were how it operated.
Posted on 4/15/13 at 10:07 pm to WikiTiger
quote:
Credit cards and PayPal can not.
I think you deal with the "American bubble" with this kind of topic. Most Americans don't realize that people in other countries (even first world) cannot use credit cards to purchase from some companies in the US.
I was on a project where the company did not accept credit cards from Germany due to the fraud rates...so the answer for Nigeria is obviously a no, as well.
Posted on 4/15/13 at 10:10 pm to WikiTiger
quote:
Man, I'm glad someone sees the big picture around here. I was beginning to think I was alone.
I think others get caught up in the success of BTC in the here and now more so than how it can redefine the entire infrastructure of how transactions occur in the near future.
Thinking outside of the box in regards to the impact BTC can have on the exchange of goods and services is quite simple. I do not think we have even started scratching the surface on the ways that in can challenge the status quo, whether economically or politically.
Posted on 4/15/13 at 10:12 pm to WikiTiger
quote:
Right now bitcoin doesn't have many users.
Right, and that is the key challenge. For bitcoin to succeed as a currency it has to appeal to the man in the street, not just merchants. And I doubt most WalMart customers are able to wrap their minds around bitcoins.
Posted on 4/15/13 at 10:14 pm to WikiTiger
quote:
Man, I'm glad someone sees the big picture around here. I was beginning to think I was alone.
Lots of people with business/financial backgrounds in here. I think we have a habit of trying to test the feasibility of ideas
Posted on 4/15/13 at 10:23 pm to ZereauxSum
quote:
Lots of people with business/financial backgrounds in here. I think we have a habit of trying to test the feasibility of ideas
I see it as two separate topics altogether.
1) Feasibility of the current BTC setup to become a primary economic medium for the world.
2) What will come from the ways in which BTC is challenging the status quo and providing a possible alternative of bountiful benefits
On 1...I have serious doubts it catches the mainstream and remains feasible.
On 2...I have no doubts that it forces people to think differently about the way that value is exchanged.
Posted on 4/15/13 at 10:34 pm to lynxcat
quote:
I see it as two separate topics altogether.
1) Feasibility of the current BTC setup to become a primary economic medium for the world.
2) What will come from the ways in which BTC is challenging the status quo and providing a possible alternative of bountiful benefits
On 1...I have serious doubts it catches the mainstream and remains feasible.
On 2...I have no doubts that it forces people to think differently about the way that value is exchanged.
I think I can get behind that analysis.
Posted on 4/15/13 at 10:38 pm to WikiTiger
My favorite part- fraud risk: ZERO (As opposed to HIGH)
Seems legit
In all seriousness, it's just one more line of deceit. PayPal will have your back if you get screwed over, pretty much 100% of the time. I'm sure bitcon will do the same?
Posted on 4/15/13 at 11:21 pm to lynxcat
Is it just me or does wiki seem desparate when discussing this?
Posted on 4/15/13 at 11:40 pm to WikiTiger
quote:No, it is promotional material from BitPay's website. LINK
This is a discussion about bitcoin as a payment network.
When I went to BitPay's website home page it specifically says "Processing as low as 0.99." It does not guarantee a 0.99% processing fee for every transaction.
How well capitalized is BitPay? Since they are assuming all currency exchange risk one bad break and they could be toast. What happens if Mt.Gox shuts down? BitPay could be in a situation where they cannot conduct currency exchanges, or combinations of exchanges, to convert from Bitcoins to some other currencies fast enough to settle with rheir customers.
BitPay is making claims it may not be able to satisfy at the fees it is advertising.
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