Bitcoin Exchange that except Debit Card deposits

[BitMofo]

Hi,

I am just wondering when/if or if there are currently plans for a bitcoin exchange accepting debit card deposits? This would allow buying coins to be MUCH quicker and cheaper.. What is the current reason that this has not been attempted?

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[Elwar]

Step 1. Deposit $10,000 to Bitcoin Debit exchange.
Step 2. Exchange $10,000 into X Bitcoin.
Step 3. Tell bank the $10,000 was invalid, request refund.
Step 4. Take X Bitcoin wallet and spend however you want.

[CubedRoot]

Step 1. Deposit $10,000 to Bitcoin Debit exchange.
Step 2. Exchange $10,000 into X Bitcoin.
Step 3. Tell bank the $10,000 was invalid, request refund.
Step 4. Take X Bitcoin wallet and spend however you want.

Yep, this is the exact reason you will never see an exchange that lets you fund your account in this manner.

[Rassah]

I had a thought about using prepaid VISA cards you can top off.

Buy such a VISA, write down the info, and send the VISA to the exchange operator. If you want to transfer money into your account, top off the VISA with another method (go to WalMart and deposit cash, or add money to it using another card), notify the exchange, and have them march to the nearest ATM and use your card to withdraw the balance into cash.

It's convoluted, and likely costly, but if you trust the exchange with your money, you can keep more on the card than you want to buy BTC with, and just ask them to take the cash from it for the amount of BTC you want to buy.

[kjj]

You can do a chargeback with a prepaid card just like with a normal card.

The chargeback rules are enforced by VISA/MasterCard/Discover/etc, not by the issuing bank.

[sadpandatech]

I had a thought about using prepaid VISA cards you can top off.

Buy such a VISA, write down the info, and send the VISA to the exchange operator. If you want to transfer money into your account, top off the VISA with another method (go to WalMart and deposit cash, or add money to it using another card), notify the exchange, and have them march to the nearest ATM and use your card to withdraw the balance into cash.

It's convoluted, and likely costly, but if you trust the exchange with your money, you can keep more on the card than you want to buy BTC with, and just ask them to take the cash from it for the amount of BTC you want to buy.

  Its actually simple and only cost a few dollars per refill. You are able to refill them online with just the card number via moneypak.  Now the catch is, that the owner is able to receive a more permanent card with their billing info assigned to it which would allow them to report the card stolen, likely after they have used it to purchase said bitcoins and received them..  I am not familiar with the issuers policies on stolen cards and aleged transactions as a result of said theft. Might be worth looking into. That aside they should still be useful for a one time use of transfer if there is no recourse for a would be scammer to recover funds they had already spent from the card.

[Rassah]

You can do a chargeback with a prepaid card just like with a normal card.

The chargeback rules are enforced by VISA/MasterCard/Discover/etc, not by the issuing bank.

you can't chargeback cash that the exchange pulled out of an ATM.

[kjj]

You can do a chargeback with a prepaid card just like with a normal card.

The chargeback rules are enforced by VISA/MasterCard/Discover/etc, not by the issuing bank.

you can't chargeback cash that the exchange pulled out of an ATM.

Ahh, cash, good point.  That would work, but it won't scale.

[airdata]

Yeah, unfortunately for the honest people here, there's 10 scammers to every 1 of us.  It's why we can't have nice things.

[Cryptoman]

You can buy a Green Dot card at Walmart/CVS/etc. and use it to buy BTC from someone (like me) who accepts them.  Or, try to find a naive soul on #bitcoin-otc.

[Phinnaeus Gage]

You can buy a Green Dot card at Walmart/CVS/etc. and use it to buy BTC from someone (like me) who accepts them.  Or, try to find a naive soul on #bitcoin-otc.

Be aware of the fees: http://www.chapter7.com/the-dangers-of-prepaid-debit-cards/

One interesting takeaway from that ariticle:

According to the Times, banks expect this industry to grow from generating less than $25 billion this year, to a staggering $125 billion in 2012.

BItcoin could easily be part of that staggering $125 billion by 2012.

[FXRiot]

Dwolla and that other site can do this, right?

[bitbot]

doesnt paxum allow for debit cards? perhaps chargebacks isn't the issue but what about stolen cards?

[qwk]

Actually, there are no reliable means of sending money to someone without the possibility of chargebacks.
Not even wire transfers bank to bank, even they may be charged back (at least in most countries), but it is at least very very difficult with them.

Western Union and the like would do, as well as cash. Nothing else.
The reason is simply legal requirements, which is why even services that want to offer a non-chargebackeable transfer will most likely not be legally able to do so (probably the reason for issues with dwolla chargebacks).

Live with it. Chargebacks may occur. Cash is the only way out 

[MatthewLM]

Is this a real problem? How do banks figure out fraud from real claims? If it's a problem for bitcoin why isn't it a problem for every single thing sold on the internet?

[Rassah]

Is this a real problem? How do banks figure out fraud from real claims? If it's a problem for bitcoin why isn't it a problem for every single thing sold on the internet?

This is the reason banks and VISAs of the world charge 3% fees for most transactions. If Bitcoi n businesses charged 3% as well, chargebacks wouldn't be an issue, but then Bitcoin wouldn't have much of an advantage either.

[MatthewLM]

1. How does a fee fix anything? If someone buys bitcoins, takes them and then gets their bank to chargeback the exchange, the exchange was the victim of fraud (Which would be funny because chargeback is supposed to fix fraud).
2. Other payment methods cost money so an exchange expecting a small fee isn't a major problem, would it? It's a shame debit/credit card fees are percentage based and can be quite high.


So is there any way to fix the problem with fraud? I just suppose debit/credit cards are stupid things. Supposed to be convenient yet have silly systems which leave the merchants and consumers both worse off.

Edit: I think only credit cards usually require percentage fees to merchants. Debit cards can have fixed and small fees. A small fixed fee for debit cards wouldn't be bad. A higher fee for credit cards is not so much a problem. Will promote people not to take out unnecessary credit at least.

[Rassah]

The 3% fee makes sure that the 3% of fraudulent transactions that happen out there get covered. If fraud was more prevalent, the fee would be higher. If businesses worried about Bitcoin fraud, they could figure out how often fraud happens, and could charge a fee based on that as well. So far none do. Hopefully none will start to either, though it does put a limit on the number of ways you can buy Bitcoin.

[MatthewLM]

Here is a theoretical way around it which perhaps wont work or is illegal:

Could you accept payment by debit/credit card and then immediately move the money into a different account so that the merchant account almost never has any money in it?

What problems would that cause?

If only chargeback didn't exist.

[Rassah]

Here is a theoretical way around it which perhaps wont work or is illegal:

Could you accept payment by debit/credit card and then immediately move the money into a different account so that the merchant account almost never has any money in it?

What problems would that cause?

If only chargeback didn't exist.

Sadly, you can still have the bank take your account into negative balance, and then even charge you overdraft fees. Using a non-chargebackable system (cash, wire transfer) are pretty much the only ways to do this, outside of establishing trust between investor and exchange (as with my pre-paid VISA idea above)