On a panel with MasterCard and Visa

[grau]

I am invited to join a panel discussion with local managing directors of MasterCard and Visa at a high profile Finance IT forum on 19. September.

Please feed me any arguments and facts with links you think would be helpful to make Bitcoin shine in comparison. Thanks in advance.

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[illpoet]

no identity theft for bitcoin users!

[Abdussamad]

edit: The customer is in complete control of his money. No third parties. No interference.

[bitfair]

Could be smart to really push the fact that credit/debit cards were never meant for use on the internet. Internet didn't even exist when cards were first envisioned and created, whereas Bitcoin is built from the ground up to handle payments over the internet.

Also, in order to accept payments by cards, merchants need to register+pay fees+++. To accept payments in bitcoin, all you need is a private key (i.e. a number with some specific properties).

[westkybitcoins]

Could be smart to really push the fact that credit/debit cards were never meant for use on the internet. Internet didn't even exist when cards were first envisioned and created, whereas Bitcoin is built from the ground up to handle payments over the internet.

Also, in order to accept payments by cards, merchants need to register+pay fees+++. To accept payments in bitcoin, all you need is a private key (i.e. a number with some specific properties).

This sounds good.

In addition, there was a thread on the forum (I'll search for the link) where someone asked how people used to handle mail-orders before credit cards. The response was interesting, in that people used to use irreversible payment methods, but had means of proving payment to the entity. Bitcoin with emailed pre-payment receipts ("Payment of 1.2 BTC to 1Ajk... is proof that payment has been made to My Awesome Bitcoin Co.") can serve the same function, and provide much greater benefit for merchants.

[phatsphere]

online shops have to comply with their rules and regulations.
keeping customer data secured is an effort.
bitcoin is much better suited for virtual goods.
credit card numbers are stolen all the time.

[Mike Hearn]

They're kind of inflexible. Try doing assurance contracts without a middleman - not possible.

I'd expect them to make lots of FUDish complaints about terrorism, etc. If that comes up you could point out that the largest terrorist financing case in history boiled down to "al-Qaeda learns carding".

[jdbtracker]

Bitcoin's technology can be used as the underlying system for their network, saving them billions. They can use it as an instant payment system, functioning as a front end for the Bitcoin network providing a known secure payment service; They of course can wait for the confirmations and using the blockchain, can immediately verify that the funds were in the account at a fraction of the time it takes for the first confirmation.

Keep it positive, make Bitcoins community shine, a dedicated community of the smartest 1 percent of the population backing and supporting the cryptocurrency movement; with them all problems can be solved.

Edit: They can also access other markets that were not available before because of fraud costs... Bitcoin makes fraud impossible if the right infrastructure and a Honest business is running it.

[shawshankinmate37927]

Bitcoin payments are irreversible which requires that parties involved in a transaction develop alternative ways to avoid and resolve disputes including escrow and networks of trust.

[franky1]

merchant benefits
no card readers required
no charge backs by dubious customers. only refunds from merchants for legit reasons
refund process is easier then credit card/debit card
using green addresses merchants can see customers balance before confirming transaction (meaning less time verifying balance to accept payment)
no having to keep transaction records (paper receipts) for X years
no dealing with customer service departments (self managed)
no merchant account monthly/yearly fee's or deductions from transaction value.

customer benefits
no application forms to fill
no credit checks
no waiting for postal service delivery of card and pin number
no postal theft of cards or pin numbers

.... just to list a few of the many benefits

[Itcher]

nice thread

No fraud! About 10 percent of credit-card-transactions are fraudish; the companies have accepted it due to a lack in technology, the customer / retailer pays the price.

More safety for the consumer! If I loose my EC-card everyone could go shopping with it.

Faster!

[FeedbackLoop]

With Bitcoin you are the sole person to decide where you can send YOUR money, unlike Visa and Mastercard (who don't let you send money to bitcoin services, wikileaks, etc).

 

[ArticMine]

I would mention of situations where Bitcoin is complementary as opposed to a replacement to Visa / Mastercard

Here are some examples: Can you use Visa / Mastercard to:
Give money to a busker?
Give money to a homeless person?
Pay the kid next door to do some work in the yard?
Give an allowance to you kids? Note: See pre paid fees below.
Pay your babysitter?
Reimburse an employee for expenses as a small business person?
Pay any consumer / private individual?
Buy products or services online if you have no credit or poor credit? Note: Paying 20 USD or more in fees for a pre paid debit card to purchase a 20 USD item is not the answer.
Purchase a product or service from a merchant that does not have a merchant account?
Send money to a relative that lives in a remote village in Kenya?
Pay for high value low margin items online such as gold bullion coins for example?  
...

All of these work with Bitcoin but not with Visa / Mastercard

[gendal]

Just keep it really, really simple.

Visa and Mastercard operate on the basis of "merchant-pull":   you have to give the keys to your safe to the merchant and then trust them to "pull" from your account only the amount they said they will.

To create this trust in consumers, Visa and MC have spent fifty years building an ever-more elaborate edifice:  PCI-DSS, Chip+PIN, spending a fortune building globally recognised brands, chargeback, the Visa/MC authorisation switches, the merchant acquirer business model, 3-D Secure, CVV2, and more and more and more and more and more and more and more.  It's just *exhausting*.  It costs so much money, creates so much complexity and it's all because their solution to the problem is fundamentally *wrong*.   Merchant-pull is an *insane* way to build a retail payments system.... but if all you had was 1960s technology, that was pretty much your only choice.

Bitcoin turns this whole rotten carcas on its head and makes it possible to do "consumer-push" instead.

The merchant tells *you* how much they want and you then send it to them.  *You're* in control.   *You* keep hold of the keys. They only get what *you* give them.  No need to trust the merchant.  No need for chip and PIN.  No need for *any* of the barnacles that are dragging the card industry down as it attempts to make a 1960s analogue technology relevant in a digital age.

(A missing link, of course, is exactly *how* the merchant securely tells you how much to send - and to whom - but that's what v0.9 will begin to solve)

Richard

twitter.com/gendal

[grau]

Thanks a lot for the great input, I summarize just the points that remember me to the details.

pro Bitcoin

• lower costs for customer and merchant
• independent proof of payment
• infrastructure suitable for interbank settlement
• separates technology and dispute resolution
• auditable transaction record for ever
• assurance contracts
• complementary use (donations, kids, oversees remittance)
• be your own bank

against Credit Cards

• chance of identity theft
• chargebacks for merchants
• third party in the transaction
• geopolitical restrictions
• was not meant for the internet, card not present transactions were not intended
• fraud

Do you have a link to what "al-Qaeda learns carding" refers to?

Other useful links like below I collected from earlier forum posts?
http://www.pcpro.co.uk/news/383680/instagram-likes-worth-more-than-stolen-credit-cards

http://www.fortmilltimes.com/2013/08/19/2898687/global-credit-debit-and-prepaid.html

[deltanine]

This sounds good.

In addition, there was a thread on the forum (I'll search for the link) where someone asked how people used to handle mail-orders before credit cards. The response was interesting, in that people used to use irreversible payment methods, but had means of proving payment to the entity. Bitcoin with emailed pre-payment receipts ("Payment of 1.2 BTC to 1Ajk... is proof that payment has been made to My Awesome Bitcoin Co.") can serve the same function, and provide much greater benefit for merchants.

Here is the old people thread you mentioned:
https://bitcointalk.org/index.php?topic=270898.0

[axus]

I would mention of situations where Bitcoin is complementary as opposed to a replacement to Visa / Mastercard

Here are some examples: Can you use Visa / Mastercard to:
Give money to a busker?
Give money to a homeless person?
Pay the kid next door to do some work in the yard?
Give an allowance to you kids? Note: See pre paid fees below.
Pay your babysitter?
Reimburse an employee for expenses as a small business person?
Pay any consumer / private individual?
Buy products or services online if you have no credit or poor credit? Note: Paying 20 USD or more in fees for a pre paid debit card to purchase a 20 USD item is not the answer.
Purchase a product or service from a merchant that does not have a merchant account?
Send money to a relative that lives in a remote village in Kenya?
Pay for high value low margin items online such as gold bullion coins for example?  
...

All of these work with Bitcoin but not with Visa / Mastercard

I'd be interested in hearing how to accomplish these with Bitcoins.  I'd imagine my babysitter is about as likely to accept a credit card as she is Bitcoins.  The credit card method here is "go to an ATM".

[Mike Hearn]

http://privacy-pc.com/articles/how-terrorists-encrypt-5-international-anti-terror-operations.html

[bitfair]

Could you put the "panel discussion" in some kind of context (e.g. overarching topic, etc.) that could make it easier to make useful suggestions?

[ArticMine]

I'd be interested in hearing how to accomplish these with Bitcoins.  I'd imagine my babysitter is about as likely to accept a credit card as she is Bitcoins.  The credit card method here is "go to an ATM".

The key difference is that the babysitter is eligible for a Bitcoin wallet but not for a merchant account. As for using a credit card or Bitcoin for that matter to get cash that ignores the whole point of the debate.

[elux]

Visa and Mastercard operate on the basis of "merchant-pull":   you have to give the keys to your safe to the merchant and then trust them to "pull" from your account only the amount they said they will.

To create this trust in consumers, Visa and MC have spent fifty years building an ever-more elaborate edifice:  PCI-DSS, Chip+PIN, spending a fortune building globally recognised brands, chargeback, the Visa/MC authorisation switches, the merchant acquirer business model, 3-D Secure, CVV2, and more and more and more and more and more and more and more.  It's just *exhausting*.  It costs so much money, creates so much complexity and it's all because their solution to the problem is fundamentally *wrong*.   Merchant-pull is an *insane* way to build a retail payments system.... but if all you had was 1960s technology, that was pretty much your only choice.

Bitcoin turns this whole rotten carcas on its head and makes it possible to do "consumer-push" instead.

The merchant tells *you* how much they want and you then send it to them.  *You're* in control.   *You* keep hold of the keys. They only get what *you* give them.  No need to trust the merchant.  No need for chip and PIN.  No need for *any* of the barnacles that are dragging the card industry down as it attempts to make a 1960s analogue technology relevant in a digital age.

That is a one hell of an elevator pitch. Bravo!

[Carlton Banks]

An "Up your sleeve" retort to problems with "no central authority" or "peer to peer money downloading" type-comments: I believe it is the Mastercard transaction network that employs a peer-to-peer topology to help them keep the data transmission levels low, and ergo, costs down. I would guess they may have some type of distributed ledger too, but I've only got a faint memory of all this. Perhaps you could ask them to explain the similarities and differences for you, I'd be interested to hear what they themselves would say 

[deepceleron]

These are problems that are unfixable with credit cards. Until they switch to a something you have + something you know + real crypto that prevents interception or reuse of a payment authorization, guarantee any authorized payment will be instantly and irrevocably paid to the merchant, and quit becoming a better-business-bureau, they will only suck.

Traditional payment networks (...) suffer inherent weaknesses:

• Some payment fraud is unavoidable,
• Completely non-reversible transactions are not possible; payment processors are involved in disputes,
• Identity fraud and remote account takeover using stolen credentials are possible,
• Payment processors can block funds and freeze accounts,
• You must provide your credit card or account number to sites, which can be stolen by hackers to spend your money.

Bitcoin has none of these problems:

• Confirmed Bitcoin payments are absolutely trustable,
• Payments are non-reversible; money cannot be recalled by the sender,
• Identity theft is a non-issue - payment recipients don't need to obtain the identity of buyers or store personal information to take payments,
• Nobody else can interfere with your Bitcoin balance or your ability to send or receive money,
• You are in control of your money - when you send a payment, the recipient or hackers cannot make other fraudulent withdraws from your wallet.

[TitanBTC]

Is there any way for us to plant bitcoin supporters in the audience so we can grumble with distrust at everything the CC companies say?  Professional promoters call this "papering the walls" but its been around since the days of Athenian democracy. 

There's noting like spontaneous cheers and applause to change people's hearts and minds.

[waxwing]

The merchant tells *you* how much they want and you then send it to them.

HOw is this different from a credit card?

 *You're* in control.   *You* keep hold of the keys.

This will not be felt as an advantage for most people. The analogy to the "key" with a credit card would be the pin number. In both cases, they can be lost or forgotten - the key difference is if you lose the card, the bank will reimburse/restore the facility after identification. If you lose your Bitcoin keys, forget it (assuming you're using Bitcoin directly and not via a third party).

They only get what *you* give them.

How is this different from a CC? Maybe I missed something here.

 No need to trust the merchant.  

If using Bitcoin in the normal sense, this is clearly false. Making this false statement as part of the pitch is not helpful. Of course there is escrow and other third party quasi-Bitcoin setups but that doesn't change the falsity of this statement.

No need for chip and PIN.

True, but there is need for a key and an internet connection.

 No need for *any* of the barnacles that are dragging the card industry down as it attempts to make a 1960s analogue technology relevant in a digital age.

Calling it "60s technology" isn't a particularly fair attack, really. It's based on a financial architecture that is indeed old, but of course it has moved on within that architecture.

The advantages of a credit card to a modern day first world consumer are easy to state: you can get your money back if someone cheats you. It has worldwide acceptance. If you lose your card, your money is not lost. You can pay for things with money you haven't yet earned.

The main disadvantage is well hidden: the slight extra cost that all buyers (credit card or not) bear because the merchant passes it on to you. The other minor disadvantages are to do with the headaches of bureaucracy and also things like charges and fees and perhaps loss of privacy.

Having said all this I will seem like an apologist for the current financial system, but actually I am anything but. My main purpose is to point out something I believe many are wilfully ignoring: Bitcoin is a replacement for cash - digital cash. It is not a replacement for the banking system. This was clearly stated by Satoshi from the beginning, and is obvious from the design.

Don't fall into either extreme: it is not a replacement for the entire financial system, but neither will it leave that system unchanged.

By changing the underlying medium of exchange (assuming it succeeds of course), Bitcoin will inevitably change the way banking, lending, commerce and so on are done. But it cannot provide all the functionality currently provided by banks, card providers, stock exchanges and so on - and pretending it can just weakens our arguments and makes us look naive.

[gendal]

The merchant tells *you* how much they want and you then send it to them.

HOw is this different from a credit card?

Thanks for calling me on this...  it shows I didn't do a good enough job of explaining my key point.

The point I was trying to make was that the architecture of card processing has a fundamental weakness: the consumer authorises the merchant to generate and send a message to the consumer's card issuer (via the card network) to take funds from their account  However, ensuring that the amount you authorised matches the amount they request is decidedly non-trivial.  In the absence of controls, the amount they ask for could be anything.  This means that every time you use your card you are open to the risk that the merchant asks for far more than you were expecting.

To mitigate this risk, the edifice of card security grew up over time....  in the paper days, the fact that both the merchant and retailer had an identical copy of the voucher allowed the consumer to dispute a fraudulent transaction. More recently, technologies such as chip+pin try to do something similar.  But they're all really just sticking plasters on the funamental problem: card processing relies on the merchant "pulling" the funds from the consumer's card issuer.

Now sure... it works (usually) - but the cost and complexity of making it work safely is large.

The point I was trying to make was that Bitcoin (like cash, as you say) works differently.  The key communication link is from the consumer to the merchant (i.e. a "push") and the consumer has full control over how much they send.

Now this isn't perfect...  you have to solve the problem of how the consumer knows *where* to send the money and all your other objections are valid (e.g. consumer has to be online, etc, etc)

But as an opening statement, I think this characterisation could be a very effective way of destabilising/undermining any representative from the card industry who one suspects of planning to spread FUD.

 *You're* in control.   *You* keep hold of the keys.

This will not be felt as an advantage for most people. The analogy to the "key" with a credit card would be the pin number. In both cases, they can be lost or forgotten - the key difference is if you lose the card, the bank will reimburse/restore the facility after identification. If you lose your Bitcoin keys, forget it (assuming you're using Bitcoin directly and not via a third party).

Agreed... I wasn't really addressing the pain of key management, etc...  this was really just a consequence of the push versus pull observation

They only get what *you* give them.

How is this different from a CC? Maybe I missed something here.

Hopefully my comments above helped explain what I was trying to convey - but the point I was making was that when you use a card you aren't actually "paying" the merchant and you aren't transferring funds to them.  You are *authorising* the merchant to pull.  And a huge amount of work is needed to ensure that what they actually pull from your account is what you authorised them to pull!

 No need to trust the merchant.  

If using Bitcoin in the normal sense, this is clearly false. Making this false statement as part of the pitch is not helpful. Of course there is escrow and other third party quasi-Bitcoin setups but that doesn't change the falsity of this statement.

I was too broad... I meant "no need to trust the merchant to pull only the funds you authorised them to pull"

 No need for *any* of the barnacles that are dragging the card industry down as it attempts to make a 1960s analogue technology relevant in a digital age.

Calling it "60s technology" isn't a particularly fair attack, really. It's based on a financial architecture that is indeed old, but of course it has moved on within that architecture.

I think it probably *is* fair :-)    The "authorise merchant to pull and put in place controls to make sure they only pull what they said they would" is the only way you could build the system in the 60s.  They have moved in terms of architecture since then but this fundamental model is still at the heart of how cards work... and my argument is that it's not an ideal way to do things. 

By changing the underlying medium of exchange (assuming it succeeds of course), Bitcoin will inevitably change the way banking, lending, commerce and so on are done. But it cannot provide all the functionality currently provided by banks, card providers, stock exchanges and so on - and pretending it can just weakens our arguments and makes us look naive.

Sorry - that wasn't my intention.

Bitcoin is almost laughably immature in so many respects...  but by using "push" rather than "pull" as its core funds movement philosophy, I would argue it's on the right side of history

[westkybitcoins]

Having said all this I will seem like an apologist for the current financial system, but actually I am anything but. My main purpose is to point out something I believe many are wilfully ignoring: Bitcoin is a replacement for cash - digital cash. It is not a replacement for the banking system. This was clearly stated by Satoshi from the beginning, and is obvious from the design.

Hmm. Great point. I believe I've been viewing the two (digital cash and digital banking) as one, right from the start.

In reality, in the future we may see online sites with options to pay with Bitcoin (digital cash), or Bitcard (Bitcoin-based bank card). We'll have the usual sorts who tut-tut over the danger of holding all that digital cash at home, on your own computers, when it could all be safe and sound in BitBank, or whatever sort of overlaying system crops up on top of Bitcoin.

[moni3z]

Visa/MC require you to accept all their cards, regardless of the rate, and now it's illegal for merchants to charge extra to cover their insane fees, so prices of goods are being jacked up to serve their monpoly regardless of what method you pay with http://www.nytimes.com/2012/08/09/business/smallbusiness/visa-and-mastercard-settle-lawsuit-but-merchants-arent-happy.html

[BombaUcigasa]

It allows people to pay money for services and products, just like the electronic system, except it's decentralized, cheaper, faster, more secure, and you're not needed anymore. Bye!

[smoothie]

no identity theft for bitcoin users!

True. It would just be complete wallet theft if anyone ever got access to your private key.

[HeliKopterBen]

I would mention of situations where Bitcoin is complementary as opposed to a replacement to Visa / Mastercard

Here are some examples: Can you use Visa / Mastercard to:
Give money to a busker?
Give money to a homeless person?
Pay the kid next door to do some work in the yard?
Give an allowance to you kids? Note: See pre paid fees below.
Pay your babysitter?
Reimburse an employee for expenses as a small business person?
Pay any consumer / private individual?
Buy products or services online if you have no credit or poor credit? Note: Paying 20 USD or more in fees for a pre paid debit card to purchase a 20 USD item is not the answer.
Purchase a product or service from a merchant that does not have a merchant account?
Send money to a relative that lives in a remote village in Kenya?
Pay for high value low margin items online such as gold bullion coins for example?  
...

All of these work with Bitcoin but not with Visa / Mastercard

You could use these examples to show how incorporating bitcoin into their business would open them up to entirely new markets that they have been unable to tap before, generating new sources of revenue.

[ixne]

You could also mention that, while not completely anonymous, your use of bitcoin isn't inextricably tied up with personally identifiable information.  You don't need to announce to the merchant who you are and where you live, and it is much harder for companies to collect, store, and sell data about you and your purchases.

[RodeoX]

Another vote for bitcoin's utility, security, and low price. For on-line shopping nothing comes close in these areas.

[TangibleCryptography]

Could be smart to really push the fact that credit/debit cards were never meant for use on the internet. Internet didn't even exist when cards were first envisioned and created, whereas Bitcoin is built from the ground up to handle payments over the internet.

Also, in order to accept payments by cards, merchants need to register+pay fees+++. To accept payments in bitcoin, all you need is a private key (i.e. a number with some specific properties).

This. This. This and This.

Know your audience.  Those in the audience won't care about ending the Fed, the conspiracy of monetary inflation, the abuse of banks, anything about fractional reserve, or the benefits of anarchy and the power of Bitcoin to defund the state.

Know your audience.  Anyone who has accepted credit cards only and lost money to either identify fraud or so called "friendly fraud" will care about how CC & Internet don't work well together.  IIRC something like 90% of all credit card fraud involves "card not present" transactions.  It was never designed for that any everything in the past twenty years to reduce/control it has been a bandaid at best.  

Painting a picture for the audience about how Bitcoin is better for the merchant
1) no chargebacks --- ever
2) no need for a processors however processors (bitpay) can exist because many merchants want a turnkey solution
3) low/negigible fees (don't say "free")
4) open network, anyone can participate, build value added services, etc.
5) merchants can eliminate the cost and expensive of trying to identify their customers to stop payment fraud.
6) merchants can accepted orders from Somolia with no more risk than New York (use name of city where conference is located).
7) merchants don't need to hold on to cardholder information and thus there is less liability to the merchant (identity theft lawsuit) in the event of a breach of the merchant's servers.

[domob]

There are all very good and valid points already in this thread.  Let me just add my own recent experience:  It seems credit cards are prevalent in the US, but not so much in Europe.  I don't have one for instance, and also don't want to have one.  (Not because of my credit rating, it would be easy to get a card - but I really don't want it, mainly for the reasons listed above already.)  However, I just tried to book a hotel for my vacation, and it just wasn't possible without a credit card.  I even wrote to it and asked them directly whether I could pay in advance using a SEPA Euro transfer, but they didn't even reply.  Very frustrating!  On the other hand, when I went to 9flats, I had booked and paid with Bitcoins in a matter of minutes without needing to worry about banks or my non-existant credit card.

[freedomno1]

Secure transactions that prevent identity theft
No third parties required if a user is trusted
Escrow is the alternative
Trading bitcoins can occur directly between individuals anywhere in the world at lower cost.
Then converted to Fiat saving fees
Bitcoin was designed with the internet in mind
Growing adoption by merchants worldwide as they realize they do not need to pay additional fees to use bitcoin
Distrust of Mastercard and Visa as they force fees on merchants to pay for their premium card programs
Irreversible trades forces trust to be guaranteed.

Guess some of the videos before in this thread might be convenient
Ignore the First one above the line that's just amusement

https://bitcointalk.org/index.php?topic=279712.msg2997331#msg2997331

Edit: This one is best http://www.youtube.com/watch?v=K7LQu-eIOO0
http://www.scribd.com/doc/142758889/Why-you-should-invest-in-Bitcoin-Tuur-Demeester

A post from the Genesis Block still reading it since I reference it now and then
http://thegenesisblock.com/wp-content/uploads/2013/07/TGB-Bitcoin-Mid-Year-Review-and-Outlook-7.pdf?d855e7

[grau]

Thanks a lot for all the input. The event will take place tomorrow in Budapest. http://www.portfolio.hu/rendezvenyek/reszletes.php?id=163

The audience will be senior banker, fund manager and some regulators. It is a local event but unique that Bitcoin is discussed in such a forum. I will update you.

I already got a follow up invitation to the deputy secretary of state responsible for financial policy affairs.

[The Bitcoin Catalog]

Thanks a lot for all the input. The event will take place tomorrow in Budapest. http://www.portfolio.hu/rendezvenyek/reszletes.php?id=163

The audience will be senior banker, fund manager and some regulators. It is a local event but unique that Bitcoin is discussed in such a forum. I will update you.

I already got a follow up invitation to the deputy secretary of state responsible for financial policy affairs.

Good luck!

[gollum]

I am invited to join a panel discussion with local managing directors of MasterCard and Visa at a high profile Finance IT forum on 19. September.

Please feed me any arguments and facts with links you think would be helpful to make Bitcoin shine in comparison. Thanks in advance.

The biggest disadvantage of VISA and Mastercard:
Security is a joke. They should have 2 Factor Authentication to accept each transaction.

The security of bitcoin is not so good either since it is really easy to lose a wallet due to theft, deletion or hard drive failure. But bitcoin is new, it is evolving. Visa/Mastercard have been around for several decades, their security still sucks.

[niko]

Given the audience, the most productive approach is (was?) to demonstrate the simplicity of use, security, mention multisig and triple-entry accounting, and insist on opportunities Bitcoin could offer: tapping into new markets (see ArcticMine above), and irreversible, secure, quick, and global payments.

You might also flirt with tracking consumer spending habits based on data mining of the ledger. While transactions generally remain pseudonymous for the outside world, the parties to the transaction can learn a lot about each other.

Be prepared to refute the common myths of anonymity.

[franky1]

I am invited to join a panel discussion with local managing directors of MasterCard and Visa at a high profile Finance IT forum on 19. September.

Please feed me any arguments and facts with links you think would be helpful to make Bitcoin shine in comparison. Thanks in advance.

The biggest disadvantage of VISA and Mastercard:
Security is a joke. They should have 2 Factor Authentication to accept each transaction.

The security of bitcoin is not so good either since it is really easy to lose a wallet due to theft, deletion or hard drive failure. But bitcoin is new, it is evolving. Visa/Mastercard have been around for several decades, their security still sucks.

they do kind of have 2 form factor..

form one. the card itself which not only has the card details (long number across the front) but also some extra info that merchants would only obtain from having a card present

form two. the pin number(for in person transactions)/ or digits on signature strip for person not present transactions.

the problem is that these 2 'forms' of identity are easy to find/replicate

[freedomno1]

Thanks a lot for all the input. The event will take place tomorrow in Budapest. http://www.portfolio.hu/rendezvenyek/reszletes.php?id=163

The audience will be senior banker, fund manager and some regulators. It is a local event but unique that Bitcoin is discussed in such a forum. I will update you.

I already got a follow up invitation to the deputy secretary of state responsible for financial policy affairs.

Good luck
I wish you the best in breaking the stereotypes of bitcoin and bringing serious conversation to it stubbornness lies deeply in the roots of tradition.

[RodeoX]

Don't be intimidated by the banksters. I have spoken to such groups and find them to be very interested. After all, they are basically money geeks.

[xxjs]

So, what happened at the meeting?

[pgbit]

So, what happened at the meeting?

They will be collating all the ideas, and releasing their own alt coin shortly!

[grau]

The event started better than expected: The second speaker a partner from Deloitte demonstrated his knowledge of cutting edge technologies by asking the crowd (it was about 150 people) if they heard the name Satoshi Nakamoto. I was one out of 4 who raised a hand. At the end of his speech he had a slide exemplifying Bitcoin as real innovation to watch out for. I talked to him in the pause, but figured that he had only a rather shallow understanding of what Bitcoin is, but who cares, recognizing it as a disruptive innovation is the right first step.

The next talks were rather boring about online-banking innovations and security of banking applications. Innovations they were touting paled in comparison to Bitcoin, but they did not seem to know yet.

The final panel was the one I participated. It was preceded by a talk of the head of regulations department of the national bank (comparable to FinCen that operates within the national bank in Hungary). He spent quite a few minutes explaining why cash is bad for the economy and what benefits more frequent electronic payments would bring on national scale. I used this to catch him in the pause and telling him that cash and electronic payments is not a contradiction but Bitcoin is electronic cash. He got interested, so I have an invite to his office

My panel was with local MDs of Visa and MasterCard and a company launching a mobile wallet in cooperation with them that enables credit card payments via NFC. I managed to go over couple of arguments you shared with me. Let me draft the most notable exchanges:

They called NFC payment a breakthrough innovation, even a butterfly moment. I made the point that changing the infrastructure behind the payments is likely a bigger a breakthrough than the difference between sliding a plastic card into a slot vs. waving the mobile phone over the slot. The MasterCard guy said that the biggest obstacle in introducing a new payment method is gaining trust that they successfully established, I countered that people likely trust even more mathematics than them. They said in 5 years we will have majority using mobile payments with NFC, I said in 5 years we will no longer talk about innovation in payments but settlement of financial instruments and rights via technologies that learned from the Bitcoin network.

Close to the end the audience could vote (with a voting machine) on the question of what they see is future of payments is and a staggering 11% voted for Bitcoin (alternatives were credit card, mobile, bank transfer and cash payments)

I think that is as good as I could possibly get it, considering that only 2.6% new Satoshi's name at the begin of the conference.

[BombaUcigasa]

The event started better than expected: The second speaker a partner from Deloitte demonstrated his knowledge of cutting edge technologies by asking the crowd (it was about 150 people) if they heard the name Satoshi Nakamoto. I was one out of 4 who raised a hand. At the end of his speech he had a slide exemplifying Bitcoin as real innovation to watch out for. I talked to him in the pause, but figured that he had only a rather shallow understanding of what Bitcoin is, but who cares, recognizing it as a disruptive innovation is the right first step.

The next talks were rather boring about online-banking innovations and security of banking applications. Innovations they were touting paled in comparison to Bitcoin, but they did not seem to know yet.

The final panel was the one I participated. It was preceded by a talk of the head of regulations department of the national bank (comparable to FinCen that operates within the national bank in Hungary). He spent quite a few minutes explaining why cash is bad for the economy and what benefits more frequent electronic payments would bring on national scale. I used this to catch him in the pause and telling him that cash and electronic payments is not a contradiction but Bitcoin is electronic cash. He got interested, so I have an invite to his office

My panel was with local MDs of Visa and MasterCard and a company launching a mobile wallet in cooperation with them that enables credit card payments via NFC. I managed to go over couple of arguments you shared with me. Let me draft the most notable exchanges:

They called NFC payment a breakthrough innovation, even a butterfly moment. I made the point that changing the infrastructure behind the payments is likely a bigger a breakthrough than the difference between sliding a plastic card into a slot vs. waving the mobile phone over the slot. The MasterCard guy said that the biggest obstacle in introducing a new payment method is gaining trust that they successfully established, I countered that people likely trust even more mathematics than them. They said in 5 years we will have majority using mobile payments with NFC, I said in 5 years we will no longer talk about innovation in payments but settlement of financial instruments and rights via technologies that learned from the Bitcoin network.

Close to the end the audience could vote (with a voting machine) on the question of what they see is future of payments is and a staggering 11% voted for Bitcoin (alternatives were credit card, mobile, bank transfer and cash payments)

I think that is as good as I could possibly get it, considering that only 2.6% new Satoshi's name at the begin of the conference.

Sounds good man!

Just out of curiosity, was their innovation talk built around NFC? Does it have anything extra above chip/pin methods, like any new types of security or communications behind it?

[grau]

Sounds good man!

Just out of curiosity, was their innovation talk built around NFC? Does it have anything extra above chip/pin methods, like any new types of security or communications behind it?

Yes, it seem to qualify as innovation that cards are loaded into a wallet app and charged via NFC (up to a limit of about 20$ without further interaction by the customer) They were pretty excited about soon combining it with biometric authentication (say iPhone).

[niko]

Sounds good man!

Just out of curiosity, was their innovation talk built around NFC? Does it have anything extra above chip/pin methods, like any new types of security or communications behind it?

Yes, it seem to qualify as innovation that cards are loaded into a wallet app and charged via NFC (up to a limit of about 20$ without further interaction by the customer) They were pretty excited about soon combining it with biometric authentication (say iPhone).

From the consumer privacy perspective, their solutions seem designed for tracking. Even a static bitcoin address offers at least some uncertainty, which is completely removed by the biometric NFC wallet.

[smoothie]

I am invited to join a panel discussion with local managing directors of MasterCard and Visa at a high profile Finance IT forum on 19. September.

Please feed me any arguments and facts with links you think would be helpful to make Bitcoin shine in comparison. Thanks in advance.

Please let us know how it went today.

[freedomno1]

I am invited to join a panel discussion with local managing directors of MasterCard and Visa at a high profile Finance IT forum on 19. September.

Please feed me any arguments and facts with links you think would be helpful to make Bitcoin shine in comparison. Thanks in advance.

Please let us know how it went today.

Already did and biometrics is a hot field glad to hear some comments helped

[Kupsi]

I am invited to join a panel discussion with local managing directors of MasterCard and Visa at a high profile Finance IT forum on 19. September.

Please feed me any arguments and facts with links you think would be helpful to make Bitcoin shine in comparison. Thanks in advance.

Please let us know how it went today.

https://bitcointalk.org/index.php?topic=279386.msg3191188#msg3191188

[Mike Hearn]

I recently was at a conf where a woman from Visa gave a talk on the "future of money". She was all about NFC payments as well.

I agree that it's a rather damning indictment of the existing payments industry that switching from a wired to wireless interface for the last few centimeters of a transaction is considered the the cutting edge of innovation. From their perspective though it's a big deal - it means changing all the point of sale equipment, it means somewhat more convenient payments for common transaction sizes, etc. They aren't even capable of imagining things that shake up the organisational status quo at this point.

[cypherdoc]

The event started better than expected: The second speaker a partner from Deloitte demonstrated his knowledge of cutting edge technologies by asking the crowd (it was about 150 people) if they heard the name Satoshi Nakamoto. I was one out of 4 who raised a hand. At the end of his speech he had a slide exemplifying Bitcoin as real innovation to watch out for. I talked to him in the pause, but figured that he had only a rather shallow understanding of what Bitcoin is, but who cares, recognizing it as a disruptive innovation is the right first step.

The next talks were rather boring about online-banking innovations and security of banking applications. Innovations they were touting paled in comparison to Bitcoin, but they did not seem to know yet.

The final panel was the one I participated. It was preceded by a talk of the head of regulations department of the national bank (comparable to FinCen that operates within the national bank in Hungary). He spent quite a few minutes explaining why cash is bad for the economy and what benefits more frequent electronic payments would bring on national scale. I used this to catch him in the pause and telling him that cash and electronic payments is not a contradiction but Bitcoin is electronic cash. He got interested, so I have an invite to his office

My panel was with local MDs of Visa and MasterCard and a company launching a mobile wallet in cooperation with them that enables credit card payments via NFC. I managed to go over couple of arguments you shared with me. Let me draft the most notable exchanges:

They called NFC payment a breakthrough innovation, even a butterfly moment. I made the point that changing the infrastructure behind the payments is likely a bigger a breakthrough than the difference between sliding a plastic card into a slot vs. waving the mobile phone over the slot. The MasterCard guy said that the biggest obstacle in introducing a new payment method is gaining trust that they successfully established, I countered that people likely trust even more mathematics than them. They said in 5 years we will have majority using mobile payments with NFC, I said in 5 years we will no longer talk about innovation in payments but settlement of financial instruments and rights via technologies that learned from the Bitcoin network.

Close to the end the audience could vote (with a voting machine) on the question of what they see is future of payments is and a staggering 11% voted for Bitcoin (alternatives were credit card, mobile, bank transfer and cash payments)

I think that is as good as I could possibly get it, considering that only 2.6% new Satoshi's name at the begin of the conference.

Congratulations.

That is a good result as an absolute value and as a relative value from beginning to end.

[NewLiberty]

Congratulations on opening some banker minds even without the benefit of a crowbar.
Very well done.  Thank you.

[Elwar]

So the credit card industry's innovation is mobile payments?

Kindly thank them for spending their advertising and marketing money to get people comfortable with something Bitcoin can already do. The more people get used to making mobile payments, the easier it will be to transition to Bitcoin.

[BombaUcigasa]

I recently was at a conf where a woman from Visa gave a talk on the "future of money". She was all about NFC payments as well.

I agree that it's a rather damning indictment of the existing payments industry that switching from a wired to wireless interface for the last few centimeters of a transaction is considered the the cutting edge of innovation. From their perspective though it's a big deal - it means changing all the point of sale equipment, it means somewhat more convenient payments for common transaction sizes, etc. They aren't even capable of imagining things that shake up the organisational status quo at this point.

Oh, how cute, you can use a technology in your field 10 years after it's launch...

Imagine explaining her that YOU can execute money transfers of over 1 000 000 USD, from within your mobile phone, to any other person on the planet, within the hour, and with possibly NO FEE.

Or that you can store that million dollars on a sticky note or even in your mind!

And not only that, but your value grows by 1000% each year* without you doing or risking anything!

(*deflation will slow down once adoption reaches final levels and the adoption S curve is formed)

[Mike Hearn]

Well, to be fair to Visa they have an enormous legacy system that has to be managed. Someone has to do it.

The woman at the conference gave a pretty good talk actually, it was quite engaging (IMHO better than the one by the guy from Square). Someone in the audience asked about settlement times (a few days, currently, ignoring chargebacks) and she pointed out that when she started settlement times were routinely in the region of weeks or months in some parts of the world. Back then it was all paper based, and in some places (like Greek islands) someone had to actually travel around on a motorbike collecting the paperwork from the zipzap machines, take it to a clearing office, which then batched it up again and delivered it by hand to the next office in the chain, etc. So from their perspective going from months down to 3 days is a big improvement. Of course compared to 10 minutes it's still pretty poor.

But, again, let's be fair here. Although NFC card payments might seem kind of trivial to us pulling out your card, waiting for it to sync with the network, entering your PIN, waiting again, confirming the amount etc ... it slows things down a lot. Whenever you make something much faster and simpler, people do more of it. There's going to be real economic impact to a big rollout of NFC card payments just in terms of increased commerce, because the card networks are so huge. Especially for small purchases if people can buy something by pulling a card from their pocket, doing a 1 second tap  and then walking away, that can be a big deal.

It's always easier to do things when you start from scratch with a clean slate, and that's why Bitcoin is awesome. But VISA/MasterCard have been building their networks for decades. It's going to take a looooong time until Bitcoin handles even a fraction of the traffic they do.

[murraypaul]

The point I was trying to make was that the architecture of card processing has a fundamental weakness: the consumer authorises the merchant to generate and send a message to the consumer's card issuer (via the card network) to take funds from their account  However, ensuring that the amount you authorised matches the amount they request is decidedly non-trivial.  In the absence of controls, the amount they ask for could be anything.  This means that every time you use your card you are open to the risk that the merchant asks for far more than you were expecting.

To mitigate this risk, the edifice of card security grew up over time....  in the paper days, the fact that both the merchant and retailer had an identical copy of the voucher allowed the consumer to dispute a fraudulent transaction. More recently, technologies such as chip+pin try to do something similar.  But they're all really just sticking plasters on the funamental problem: card processing relies on the merchant "pulling" the funds from the consumer's card issuer.

Chip and Pin doesn't work like that.
The card reader is supplied by the credit card company, and communicates directly to them, not through the retailer.
The retailer enters the amount to be charged, and hands the device to you. You see on the screen how much money will be sent, and choose to enter your Pin or not. You are pushing an amount of money you choose to the retailer, not trusting them to pull the right amount.

[murraypaul]

Keep it positive, make Bitcoins community shine, a dedicated community of the smartest 1 percent of the population backing and supporting the cryptocurrency movement; with them all problems can be solved.

ROFL.
The smartest 1 percent?
This community here, at bitcointalk?
ROFL.

[BombaUcigasa]

Keep it positive, make Bitcoins community shine, a dedicated community of the smartest 1 percent of the population backing and supporting the cryptocurrency movement; with them all problems can be solved.

ROFL.
The smartest 1 percent?
This community here, at bitcointalk?
ROFL.

It's not funny, why do you laugh?

[NewLiberty]

It is an interesting point.  The Facebook marketing rollout started at Harvard.  Lots of people wanted to know people at Harvard, and initially it was exclusive.

The WWW started at CERN, some pretty smart people there, again university focused.

Bitcoin started with crypto programmers, and systems and security folks cross-bred with monetary philosophy.  Each of these starting groups are fairly elite, with high barriers of intelligence and depth of expertise needed to participate meaningfully.

Are we at the dilution phase, where it is no longer just the smartest?  If so, that suggests rapid growth ahead as we swing up the bell-curve into the "normals".

[gendal]

Chip and Pin doesn't work like that.
The card reader is supplied by the credit card company, and communicates directly to them, not through the retailer.
The retailer enters the amount to be charged, and hands the device to you. You see on the screen how much money will be sent, and choose to enter your Pin or not. You are pushing an amount of money you choose to the retailer, not trusting them to pull the right amount.

Not quite.

The card reader is provided by a merchant acquirer.  This firm may well also have an issuing arm but they are not "the credit card company".  Think about it: does your local retailer have a different device for each of the thousands of different issuers of Visa or Mastercard cards in your country?  Clearly not.

The credit card system works on what's known as the four-party model (although there are really five parties):

* you, the purchaser
* your card issuer (usually a bank, which has usually issued you a card with both their logo and one of the card networks printed on it.  let's assume it's visa for now)
* visa (the switch)
* the merchant acquirer (the firm that "acquires" transactions from the merchant and routes them to the appropriate network)
* the merchant.

In this model, it simply isn't possible for what you said to be true.  The communication is from the merchant, to the merchant acquirer, to the switch and then to the issuer.

Sure, you may well authorise the request and provide a credential (your PIN) that allows the merchant to attest to the fact that you were present and authorised the request.  But it's still a *request*.  And you're trusting all the parties in that chain to present the request to the issuer such that what you authorised matches what is taken.

Now the system does actually work and the checks+balances mean that mistakes are found and customers do get refunds.  But it's a ridiculously complex system, and one that works the way it does (as Mike Hearn suggests a few posts back) because of the multi-decade history of the system and the technical constraints that existed when it was invented.

And I would argue that it's unambiguously a "pull" from the merchant, not a "push" from the purchaser.

[CasinoBit]

Do they all look like dr. evils?

[murraypaul]

Chip and Pin doesn't work like that.
The card reader is supplied by the credit card company, and communicates directly to them, not through the retailer.
The retailer enters the amount to be charged, and hands the device to you. You see on the screen how much money will be sent, and choose to enter your Pin or not. You are pushing an amount of money you choose to the retailer, not trusting them to pull the right amount.

Not quite.

The card reader is provided by a merchant acquirer.

I accept the correction here.

In this model, it simply isn't possible for what you said to be true.  The communication is from the merchant, to the merchant acquirer, to the switch and then to the issuer.

But not here.
The device communicates to the 'merchant acquirer', the merchant is not part of the chain.

Sure, you may well authorise the request and provide a credential (your PIN) that allows the merchant to attest to the fact that you were present and authorised the request.  But it's still a *request*.  And you're trusting all the parties in that chain to present the request to the issuer such that what you authorised matches what is taken.

I'm not trusting the merchant (beyond trust that they have not supplied a hacked device), because their role ended when they entered the purchase amount into the device. I get to see that before entering my PIN to authorise the transaction, and I keep the device until the transaction has completed.

And I would argue that it's unambiguously a "pull" from the merchant, not a "push" from the purchaser.

I think that is ultimately semantics.
The important point is that I am choosing the amount to be transferred, I am not relying on the merchant for that.

[gendal]

I think that is ultimately semantics.
The important point is that I am choosing the amount to be transferred, I am not relying on the merchant for that.

Where I think it gets beyond semantics is when you think of the IT implications.   The data that passes along the communication chain from retailer* to acquirer to switch to issuer is extremely sensitive and so has to be secured.  This has spawned industry standards such as PCI-DSS, which impose huge costs on all parties in the system and represents a very attractive target for bad guys, creating an escalating arms race.

A true "push" approach would not entail the passing of this sensitive data through this back channel from retailer (or acquirer, if you prefer) to issuer... it would rely on the customer initiating a payment *to* the merchant themselves... the attack surface is a lot smaller.  Now, I'm not saying this is perfect....  the question of how the merchant communicates their request to the customer is a difficult one.  The Bitcoin payment protocol work, which currently relies on X.509 certificates, etc., shows how hard this is to do on the internet.   For face-to-face transactions, you have to find a way for the merchant to share their "receipt address" to the customer in a way that can't be spoofed, etc.   The "bitcoin pub" in London does this by displaying a QR code on their POS device, that the customer can scan - but it's not particularly elegant.


(* in many cases, the retailer really does have sight of the card details... the card readers are integrated into POS systems and transactions are routed through branch systems...  it's not the case that all retailers never see the card details).