Getting around VISA and MasterCard

[kizzoboy]

Has anyone here thought of a way to somehow set up an app that has a bitcoin payment system without the person using the app even knowing that they're paying for something with a bitcoin?  I'm interested in financing an app that does this - I just haven't found an easy way to explain what I want to developers.  Here's the process I'm thinking below.

1 - User downloads the app for free.  User enters bank checking and routing number.
2 - User purchases a service through the app.  The good or service is provided by a company that is also using the app.
3 - User pays $50.00 for the good or service, $50.00 is used to purchase a bitcoin.
4 - Bitcoin is transferred to the company using the app.  However, they only see it show up as $50.00
5 - Company can cash out whenever, (but is somehow encouraged to cash out soon to avoid volatility in btc price).  When they "cash out" they're actually selling the bitcoin for $50.00

Both the customer AND the company that use the app never see or realize that they just conducted a bitcoin transaction.  No visa or mastercard fee.  I don't think you'd even need a money transmitter license because you wouldn't be transmitting money, you'd be transmitting a bitcoin. 

Does anyone think this makes sense?  I'm racking my brain on how to make an app where I can get some one to buy something and from some one selling something, but with NO visa/mastercard fee.

[farlack]

fincen regulations, and I don't think Visa or Mastercard will allow it.

[TrillionBTC]

This is a fantastic idea. In fact this is exactly what bitpay.com and coinbase.com does for businesses. bitpay.com has a pretty good video on how it works. There's a lot of misconceptions with companies that accept bitcoins. One being they accept bitcoins....

I saw this in a interview being done on RT about Overstock.com. The reporter made a statement saying he does not know how Overstock.com is going to handle the exchange rates for bitcoin. The answer is they don't. When you use your Visa and MasterCard the business doesn't get Visa and MasterCard credits where they can only use them where Visa and MasterCards are accepted they get USD or other fiat currencies deposited into their bank account. Bitcoin transactions on Overstock.com go through CoinBase where CoinBase receives the BTC and deposits USD into Overstock.com's bank account. If Overstock.com wanted $50 USD from you when you paid by BTC they get $50 USD with no worries of the current BTC exchange rate. This is by far not a new concept. Credit Card Companies have been dealing with exchange rates for years. For example a Japanese Man is on Vacation in the U.S. and uses his Yen backed Visa Card to by $50 USD worth of gas. The Gas Station gets $50 USD and when the Japanese Man goes home and opens his credit card statement he has a bill in Yen for that $50 USD. There's only 2 people involved in the transaction concerned with the exchange rate. The person spending the money and the merchant services processing the money not the businesses.  

I hope I answered your question.

[kizzoboy]

I kind of follow you.  I'm trying to get money from one checking account to another checking account without paying VISA.  I wouldn't really be transmitting money.  I'd be facilitating the purchase of a bitcoin by the customer that wants to "pay" for the good or service.  I then facilitate the transfer of the bitcoin to the ownership of the company that's trying to get paid.  Lastly, I facilitate the sale of the bitcoin that the company trying to get paid has in the amount of $50.

The problem I'm having is that I'm worried about people being put off by the "virtual currency is evil" crowd.  However, I know people will love the low fees associated with virtual currency transactions.  In essence, I hide the fact that a virtual currency transaction as actually happening (even though it is) just to take advantage of the low fees.

If only I could program that good....