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.