Points, Miles, Cash-back... Should we create similar systems in bitcoin?

[KonstantinosM]

Credit cards lure customers in with all this nonsense. The money has to come from somewhere, so I think the most reasonable thing we can do with bitcoin is make it so that it undercuts credit cards by being the cheaper option (since the merchants won't be charged fees).

So with bitcoin a merchant could charge 1.3-3.5% less than with credit cards and use the money of the future.

I understand that this is a minor issue. I'm here for inflation free money that can't be confiscated by the government and the banks in the blink of an eye. But it can't hurt to give ourselves an edge when it comes to credit cards.

Pay with bitcoin and save 2% as the standard (over credit cards) would go a long way if we want bitcoin to spread.

[seoincorporation]

Credit cards lure customers in with all this nonsense. The money has to come from somewhere, so I think the most reasonable thing we can do with bitcoin is make it so that it undercuts credit cards by being the cheaper option (since the merchants won't be charged fees).

So with bitcoin a merchant could charge 1.3-3.5% less than with credit cards and use the money of the future.

I understand that this is a minor issue. I'm here for inflation free money that can't be confiscated by the government and the banks in the blink of an eye. But it can't hurt to give ourselves an edge when it comes to credit cards.

Pay with bitcoin and save 2% as the standard (over credit cards) would go a long way if we want bitcoin to spread.

I think it's impossible to add a credit system direct to bitcoin and i will explain why. If the bank loans you $1000 with 10% interest, then you have to get that extra $100 from somewhere. And bitcoin has a number of coins, so, since people can't create more coins from nowhere (Like banks printing money) the most of the people will not be able to pay back the loan with interest.

If you think this example is wrong is because you are thinking in small amounts, but thing about 10,000 btc loans and it will work

[bob123]

I think it's impossible to add a credit system direct to bitcoin and i will explain why. If the bank loans you $1000 with 10% interest, then you have to get that extra $100 from somewhere. And bitcoin has a number of coins, so, since people can't create more coins from nowhere (Like banks printing money) the most of the people will not be able to pay back the loan with interest.

OP never mentioned anywhere that a credit system should be created.

He is talking about the advantages credit cards have (points, miles, cash back).
Further, he proposed something like 1%-2% cash back / rebate when paying with BTC than compared to paying with FIAT.


@OP
There are already crypto cards available which give you cashback in crypto when using them.
Further, each merchant would have to decide for him/herself when accepting crypto. Nothing speaks against merchants giving a discount when paying with specific payment methods. Actually this is being utilized already (not with crypto tho afaik).

I am not sure what kind of system you are thinking about which would be needed.

[KonstantinosM]

I think it's impossible to add a credit system direct to bitcoin and i will explain why. If the bank loans you $1000 with 10% interest, then you have to get that extra $100 from somewhere. And bitcoin has a number of coins, so, since people can't create more coins from nowhere (Like banks printing money) the most of the people will not be able to pay back the loan with interest.

OP never mentioned anywhere that a credit system should be created.

He is talking about the advantages credit cards have (points, miles, cash back).
Further, he proposed something like 1%-2% cash back / rebate when paying with BTC than compared to paying with FIAT.


@OP
There are already crypto cards available which give you cashback in crypto when using them.
Further, each merchant would have to decide for him/herself when accepting crypto. Nothing speaks against merchants giving a discount when paying with specific payment methods. Actually this is being utilized already (not with crypto tho afaik).

I am not sure what kind of system you are thinking about which would be needed.

Simple, all I'm saying is that merchants can give a 2% discount on payment with bitcoins rather than credit cards...


For example if a taxi driver charged $10 using a credit card, they can charge $9.80 using bitcoin as they will avoid the credit card merchant fees.

So the person paying with bitcoin pays less, and that not only offsets the rewards offered by a credit card (cash back, miles, points) but it's also faster since you don't have to wait to earn rewards and it's clearer since you don't have to worry about Merchant Category Codes (MCCs)

That's a good start I think, and it would only be natural for it to be implemented.

Certain merchants like gas station might do individual loyalty programs +2% discount. So you get stacking benefits. Perhaps separating loyalty programs from  payment methods is the best way, so you get the best deal using both a loyalty program and a more advantegeous payment method.

[odolvlobo]

Simple, all I'm saying is that merchants can give a 2% discount on payment with bitcoins rather than credit cards...

That is already being done. For example, at APMEX:

Quantity    Check/Wire    BTC/BCH    CC/PayPal
1 - 9    $2,097.29    $2,119.14    $2,184.68

[BrewMaster]

but there is nothing that we can do about it! this is a merchant related decision based on their business model. whether they want to give interesting offers depends on how much of their revenue they want to be in form of bitcoin.
besides people who use bitcoin are doing it because they want what the decentralization offers them without a middle man to snoop around in their pockets or blocks them from using their money.

[20kevin20]

I would personally stay away from linking Bitcoin to any bank-like systems. Guess we all know banks are there not to help us but to bait us into basically debt slavery.

I'm not 100% sure if by "creating similar systems in Bitcoin" you mean that we should have more merchants adopting this cashback/points system or you meant that we should have this system somehow directly implemented in the Bitcoin Core. With the second option, I don't know honestly if it's even realizable..

As others answered before me, there are already merchants doing these discounts. It is completely their choice and should stay that way. But while this kind of system would bait more people into BTC, do we really need to bait anyone or do we want natural adoption? I personally believe the latter is way healthier.

Now on the other hand, considering we'll soon enough have to confront a quite harsh battle between BTC and national cryptos, these "baits" and assimilating BTC with them/banks could come in as a very handy thing to convince people that financial freedom is way more important..

[KonstantinosM]

I'm not 100% sure if by "creating similar systems in Bitcoin" you mean that we should have more merchants adopting this cashback/points system or you meant that we should have this system somehow directly implemented in the Bitcoin Core. With the second option, I don't know honestly if it's even realizable..

Hell no!

[avikz]

Credit cards lure customers in with all this nonsense. The money has to come from somewhere, so I think the most reasonable thing we can do with bitcoin is make it so that it undercuts credit cards by being the cheaper option (since the merchants won't be charged fees).

So with bitcoin a merchant could charge 1.3-3.5% less than with credit cards and use the money of the future.

I understand that this is a minor issue. I'm here for inflation free money that can't be confiscated by the government and the banks in the blink of an eye. But it can't hurt to give ourselves an edge when it comes to credit cards.

Pay with bitcoin and save 2% as the standard (over credit cards) would go a long way if we want bitcoin to spread.

Noble thought! It is indeed possible because the merchants will not be paying fees to the banks to get the settlement so the merchants will be saving around 2% + service tax on each transaction. If they want to use that money to create a loyal customer base by providing additional benefits, they can do it.

However, even though building such system is possible, the main bottleneck will be bitcoin's ever changing price. It will make the calculation extremely complex and probably needs to be calculated based on the actual transaction time, otherwise the profit can get vanished in the blink of an eye. So building such system is easier said than done!

[bitmover]

I'm not 100% sure if by "creating similar systems in Bitcoin" you mean that we should have more merchants adopting this cashback/points system or you meant that we should have this system somehow directly implemented in the Bitcoin Core. With the second option, I don't know honestly if it's even realizable..

Hell no!

I think those systems will not be created, but the old system will be adapted to bitcoin ecosystem, when adoption grows.

as demand for bitcoin payment method increases, those systems will show up naturally... Ofc someone can try to make something before everyone, and sell this idea to merchants, when they need it.

[hatshepsut93]

If merchants will be choosing to accept BTC via proxies - either those that convert to fiat, or just custodians, they won't be able to offer this BTC discount, since they'll have to pay this third party responsible for handling BTC transactions. And you are forgetting that BTC has it's own fees that make it less attractive as payment for most situations. Until LN is widely adopted, you can forget about Bitcoin being an alternative to payment cards for daily use.

[Wexnident]

Isn't it totally up to the merchant on how this would happen? Just like how there are rebates on the various services on mobile wallets. It's basically something like a promo, but with Bitcoin, and yes it's possible and could be implemented but as I said, the merchant themselves should decide on whether to do it or not though I doubt it would happen this early, especially since the number of Bitcoin merchants is on the low side.

Still honestly, it should be a separate matter from how Credit card works, even with a rebate system. I believe that it should work on a different notion, completely different from how fiats work, especially since Bitcoin usage isn't really used for everyday transactions. Even if it was adopted in the near future by the majority of the stores, a coexistence with fiat would still probably the best choice imo, with fiat being used for daily needs and Bitcoin for certain occassions.

[Velkro]

Credit cards lure customers in with all this nonsense. T

No.
Why? Because Bitcoin currently is so much more like gold than means of MASS payments.
It have transactions limits which when filled skyrockets fees.
But Bitcoin is just Gold of modern era.

Bitcoin to be considered mass payments method like credit cards in general needs second layer. Thats it. Like lighting network but who knows if lighting network will be this mass payment solution, maybe not so we need to wait for someone to make it.

[Wind_FURY]

OP, the fact that you asked that shows that you don't truly understand what actually Bitcoin is. It's not merely a cheap consumer product, plus if it doesn't solve an inefficiency, then it wouldn't be used.

[Dana888]

Credit cards lure customers in with all this nonsense. The money has to come from somewhere, so I think the most reasonable thing we can do with bitcoin is make it so that it undercuts credit cards by being the cheaper option (since the merchants won't be charged fees).

So with bitcoin a merchant could charge 1.3-3.5% less than with credit cards and use the money of the future.

I understand that this is a minor issue. I'm here for inflation free money that can't be confiscated by the government and the banks in the blink of an eye. But it can't hurt to give ourselves an edge when it comes to credit cards.

Pay with bitcoin and save 2% as the standard (over credit cards) would go a long way if we want bitcoin to spread.

I can't even imagine what would happen if bitcoin could replace credit cards. Of course, it is very good that bitcoin is a free tool from the state and it is not subject to inflation, but however, its technical side and complexity of use can play a cruel joke with its distribution among the poor. It is worth considering how to distribute bitcoin to places where it is still unknown.

[Wind_FURY]

OP, the fact that you asked that shows that you don't truly understand what actually Bitcoin is. It's not merely a cheap consumer product, plus if it doesn't solve an inefficiency, then it wouldn't be used.

Agree, in this respect Bitcoin is upwards close to gold than money and should be is considered to all intents and purposes as the store of value rather than cash for everyday use. Paying merchants with Bitcoin had so far been limited. And it’s unlikely that things will change anytime soon. And  for a clincher :

You already have your fiat for everyday use, it's efficient, but if to purchase heroine from a TOR dark market that banks cannot serve, there's nothing, there's an inefficiency. Bitcoin fixes this.

[rollingdice]

I think that using cash-back or bitcoin-back programs is unreasonable. It'd be better to offer discounts on purchases payed with Bitcoin. 

[ILuckyGuyI]

Credit cards lure customers in with all this nonsense. The money has to come from somewhere, so I think the most reasonable thing we can do with bitcoin is make it so that it undercuts credit cards by being the cheaper option (since the merchants won't be charged fees).

So with bitcoin a merchant could charge 1.3-3.5% less than with credit cards and use the money of the future.

I understand that this is a minor issue. I'm here for inflation free money that can't be confiscated by the government and the banks in the blink of an eye. But it can't hurt to give ourselves an edge when it comes to credit cards.

Pay with bitcoin and save 2% as the standard (over credit cards) would go a long way if we want bitcoin to spread.

I think building a system that includes advantages for Bitcoin users like accumulating points and using them on transactions etc. could be a nice move to attract the attention of more people. I hope a system like this can be integrated into Bitcoin and we can see businesses etc. support that system.

[Poker Player]

I don't think we should. Points and miles are systems credit card companies created to rip people off. People on average spend way more money if you give them miles, points and cash back.  Credit card companies are not little sisters of charity, they give you points because they know they will have more profits.

Bitcoin should be different, it should not incentivize spending.

I think it will be adopted because of how different to fiat currencies is, so it should not try to copy them.

[Vatimins]

     I am all for new things happening to bitcoin and all that helps it get known to many more people who are unaware of this industry but the thing here though is that if you really try to understand what bitcoin is or how the people in this industry sees bitcoin and uses it, then you would see that it would be quite difficult for your suggestion to be realized. Just to be clear though, I am not against the idea, I just think that it is very unlikely to happen.