[2018-08-28] Bitcoin Could Make Credit Cards Obsolete

[Jgilpulg]

High credit card fees continue to be borne by merchants and ultimately by consumers. Indeed, merchants pay billions of dollars to have issuers process card transactions.

https://bitcoinist.com/bitcoin-could-make-credit-cards-obsolete/

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[figmentofmyass]

payment processing (and the fees born out of it) is only one side of the equation, though. credit cards aren't just a replacement for cash. they offer credit lines, and rewards.

IMO, a lot of consumer spending is fueled by access to easy credit and spending rewards from card issuers (cash back, airline miles, etc). how is BTC going to satisfy those needs?

merchants need to accept what consumers want to use. it's not the other way around. for BTC to make credit cards obsolete, consumers must prefer BTC to using credit. transitioning away from a credit-fueled and high-spending/no-saving consumer economy is a much larger issue than "merchants pay high credit card fees, BTC is better."

[milewilda]

payment processing (and the fees born out of it) is only one side of the equation, though. credit cards aren't just a replacement for cash. they offer credit lines, and rewards.

IMO, a lot of consumer spending is fueled by access to easy credit and spending rewards from card issuers (cash back, airline miles, etc). how is BTC going to satisfy those needs?

merchants need to accept what consumers want to use. it's not the other way around. for BTC to make credit cards obsolete, consumers must prefer BTC to using credit. transitioning away from a credit-fueled and high-spending/no-saving consumer economy is a much larger issue than "merchants pay high credit card fees, BTC is better."

Agree to this one its not really focusing or do matter on how much those merchants do pay up but on the consumers itself. When we do talk those things that can a credit card can do then we would really able to say that BTC cant really give out and i dont even think that it would be transitioned easily without a heavy acceptance.Talking about fees then theres no doubt then i would go for BTC(hands down).

[cryptofonia]

Bitcoin Could Make Banks Obsolete, it'd be right.

[timerland]

High credit card fees continue to be borne by merchants and ultimately by consumers. Indeed, merchants pay billions of dollars to have issuers process card transactions.

https://bitcoinist.com/bitcoin-could-make-credit-cards-obsolete/

Just because there are obvious drawbacks with using credit card including the high fees that they mentioned, doesn't mean that bitcoin will be able to replace people's need for credit altogether. That's just not going to happen, imho.

Credit cards are completely different to bitcoin - they are essentially short term, easily obtainable loans, while bitcoin is a currency.

Obviously, bitcoin doesn't involve debt whatsoever, and buying goods on the internet with bitcoin compared to credit cards are way easier. But consumers will want credit, which is something that bitcoin itself will not be able to do as it is not a loan service. These two things are simply not comparable.

Though in the future, we may see bitcoin credit cards being issued, if adoption picks up. That still doesn't mean that bitcoin has "replaced" credit cards, though.

[yatsey87]

Well it could make them obsolete, but I doubt it. People will still need credit, but do you want to know what is going to replace plastic? Apps. More people are already paying with their phones like apple pay etc and a physical plastic card is just outdated now. Everybody has their phone on them usually so it's the logical place to go. People will still need credit, but the physical cards will likely eventually be phased out and people will just use their banking apps instead. Maybe by then people will also be using bitcoin apps which is certainly a possibility.

Just because there are obvious drawbacks with using credit card including the high fees that they mentioned, doesn't mean that bitcoin will be able to replace people's need for credit altogether. That's just not going to happen, imho.

Same with banks really. They can work side by side though. Bitcoin is a decentralized alternative at least.

[darkangel11]

Bitcoin Could Make Banks Obsolete, it'd be right.

Only if there are services offering loans. Banks used to offer you 3 main things. One was relative safety since you didn't have to hold cash at home. Crypto market eliminates this need as you are fine holding money on your own. Banks also allowed you to transfer money quickly as it wasn't needed to physically move bills between destinations. This also is eliminated by BTC. The only thing that crypto doesn't offer yet are loans.

[Harlot]

No they will be here forever, as long as people are not earning enough for their lifestyle as well as their daily needs there will be people swiping and swiping their credit cards. Plus these credit card companies have a brilliant way of hiding the big interest rate with their so-called privileges and benefits "exclusive" for their members which the users think they are really getting for free or  they think they are saving a lot with some discount. People needs money and credit cards give them the temporary solution for the lack of it.

[eternalgloom]

Bitcoin Could Make Banks Obsolete, it'd be right.

Only if there are services offering loans. Banks used to offer you 3 main things. One was relative safety since you didn't have to hold cash at home. Crypto market eliminates this need as you are fine holding money on your own. Banks also allowed you to transfer money quickly as it wasn't needed to physically move bills between destinations. This also is eliminated by BTC. The only thing that crypto doesn't offer yet are loans.

Well, there are quite a few loan providers active in the crypto world, mostly for P2P loans on a (relatively) small scale.
Now these are obviously not a replacement for low-interest loans from financial institutions, but I'm just mentioning it because these services do exist.

Heck, there has been a loan section here on the forum for so many years already.

[Kakmakr]

payment processing (and the fees born out of it) is only one side of the equation, though. credit cards aren't just a replacement for cash. they offer credit lines, and rewards.

IMO, a lot of consumer spending is fueled by access to easy credit and spending rewards from card issuers (cash back, airline miles, etc). how is BTC going to satisfy those needs?

merchants need to accept what consumers want to use. it's not the other way around. for BTC to make credit cards obsolete, consumers must prefer BTC to using credit. transitioning away from a credit-fueled and high-spending/no-saving consumer economy is a much larger issue than "merchants pay high credit card fees, BTC is better."

Well, one reason why I prefer to use Bitcoin over credit card payments, was security. I have been a victim of online credit card fraud and this is enough incentive for me to search for another safer alternative than credit cards to buy & sell over the internet. I will even use payment processors, if I have to. <Paying an extra fee for payment processors, is a small price to pay for additional protection>

The merchants also like Bitcoin, because there is no charge backs, like with credit card payment.   

[darkangel11]

Bitcoin Could Make Banks Obsolete, it'd be right.

Only if there are services offering loans. Banks used to offer you 3 main things. One was relative safety since you didn't have to hold cash at home. Crypto market eliminates this need as you are fine holding money on your own. Banks also allowed you to transfer money quickly as it wasn't needed to physically move bills between destinations. This also is eliminated by BTC. The only thing that crypto doesn't offer yet are loans.

Well, there are quite a few loan providers active in the crypto world, mostly for P2P loans on a (relatively) small scale.
Now these are obviously not a replacement for low-interest loans from financial institutions, but I'm just mentioning it because these services do exist.

Heck, there has been a loan section here on the forum for so many years already.

Yup, but most of these loans are one of these:
-only small, meaning that getting a loan for a car or a house is not happening in the crypto world, at least for now.
-usually require collateral, which is making the whole process a struggle. I haven't seen people provide ID loans, like banks do. Getting a collateral that can be sent via Internet is really hard for most people. 
-P2P cases are still very rare and finding someone who will lend you money in your area is not an easy task.
IMO this field is not even in kindergarten compared to banks.

[stompix]

This is the result of poor journalism and lack of knowledge about the system.

Yeah, bitcoin could replace DEBIT cards but not CREDIT cards.
This confusion is so annoying especially if you have some expectation from the ones publishing articles.

The merchants also like Bitcoin, because there is no charge backs, like with credit card payment.   

Yeah, especially merchants that have are keen on delivering you nothing.

Should we remember one (of the many) failures with ASICs manufacturers and how the ones that managed to pay with a card got their money back while the ones doing it with BTC are either seeking to recover what's left in courts or have long abandoned the quest?

Cards - the best solution for people who are almost sure they are going to get scammed or they will need a refund
Bitcoin - the solution for merchants that don't give a damn about the quality of the merchandise sold to the client

I bought a lot of stuff via bitcoin, but I still wouldn't trust buying something expensive for a merchant over which the customer protection office of my country has no jurisdiction.

[mazdafunsun]

I suppose it is a matter of the goods one is going to purchase and also a big deal is trust. You have to have good reputation in order for customers to use BTC or have to care about your repuatation also there is the jurisdictiono factor, if the vendor is under certian jurisdiction , it could be safe to use cryptos. Or vendor coulduse crypto gateway, but in this case fees rise and then crypto payment could potentially  be even more expensive then CC payment. This is for online payments.

i can imagine that payments on the spot with crypto POS could be much more effective since you see the merchandise and have much more trust in the seller.

[figmentofmyass]

Well, one reason why I prefer to use Bitcoin over credit card payments, was security. I have been a victim of online credit card fraud and this is enough incentive for me to search for another safer alternative than credit cards to buy & sell over the internet. I will even use payment processors, if I have to. <Paying an extra fee for payment processors, is a small price to pay for additional protection>

yeah i definitely get that. i've had my credit cards hijacked before and fraudulent purchases made. fortunately these days, credit cards always offer 0% liability for fraud. so the only loss is your time (you have to check your statements and report fraud if it occurs).

Should we remember one (of the many) failures with ASICs manufacturers and how the ones that managed to pay with a card got their money back while the ones doing it with BTC are either seeking to recover what's left in courts or have long abandoned the quest?

Cards - the best solution for people who are almost sure they are going to get scammed or they will need a refund
Bitcoin - the solution for merchants that don't give a damn about the quality of the merchandise sold to the client

I bought a lot of stuff via bitcoin, but I still wouldn't trust buying something expensive for a merchant over which the customer protection office of my country has no jurisdiction.

excellent point that i forgot to consider. i've had to charge back against dishonest merchants before, and in those cases i was very glad to have used a credit card.

and if there ever is a dispute with a merchant, it's better to have the money tied up as a credit card balance---rather than missing from your bank account (debit cards) or your bitcoin wallet.

just like BTC = protection for merchants from chargebacks, credit cards = protection for consumers from unfair or deceptive business practices.

[bbc.reporter]

payment processing (and the fees born out of it) is only one side of the equation, though. credit cards aren't just a replacement for cash. they offer credit lines, and rewards.

IMO, a lot of consumer spending is fueled by access to easy credit and spending rewards from card issuers (cash back, airline miles, etc). how is BTC going to satisfy those needs?

merchants need to accept what consumers want to use. it's not the other way around. for BTC to make credit cards obsolete, consumers must prefer BTC to using credit. transitioning away from a credit-fueled and high-spending/no-saving consumer economy is a much larger issue than "merchants pay high credit card fees, BTC is better."

Also, by accepting that bitcoin could make credit cards obsolete as fact clearly puts the ignorance of the article writer on display.

Consumer credit provided by centralized fnancial institutions in exchange for payment in interest will never be obsolete.

[magneto]

There is a relatively small chance that bitcoin would ever replace traditional banking methods. Let alone credit cards, which can be issued by anyone, and essentially is a form of easily obtainable short term credit.

While bitcoin can certainly be an alternative currency to use on the internet, I don't think that it would be able to all of a sudden make the idea of obtaining credit within the consumers a thing of a past.

Even if bitcoin somehow was able to replace fiat completely, which is unlikely, people would still seek credit. And when there is demand, there will be an industry supporting it. If mass adoption happens, bitcoin based "credit cards" or something like that would definitely pop up.

[dreamhouse]

Hope this is true. Bitcoin price will go 10 fold at least if bitcoin is used as popular as Visa or Mastercard