Using BTC vs. Using Credit / Debit cards and purchase tracking and privacy.

[DaveF]

I know I have brought this up before, but:

We all want BTC to become more and more mainstream and we all want BTC to be used everywhere.
BUT, how much are we willing to give up to get it there?

In many places in the world credit & debit cards are just the way people spend money. Without getting into all the good and bad things and all the other stuff about them one thing they do do is allow for a large amount of purchase tracking.

I have a fair number of cards that I rotate though. Some are for certain things only others are more general use. Depends on limits, any cash back offers, and other things.

One of the cards I have is a Sears MasterCard issued by CitiBank. It was originally just a Sears store card, but when they imploded they changed it to a MasterCard.
It has a stupid high interest rate and the rewards it offers (CitiBank ThankYou points) are fair at best.
So I rarely use it.

The other day I got an email from them. Spend $500 a month in Gas / Restaurants / Food Stores and get 15X points back up to $600 a month in spending at those locations. Works out to about 12.5% cash back. Guess which card went into my wallet and I have been using to get gas and food :-)

My Amazon card gives me 5% back at Amazon. BoA has a card that gives 3% back on online purchases. Discover has the 5% back on different things every quarter and so on.
Coinbase has their debit card with 4% rewards (not in BTC but some alt) but beyond that there is not much.

Paying with BTC direct we get none of that.
I use BTC a lot, but there are also many many times when I could that I use a card instead due to the benefits the card offers.

BTC does offer some level of privacy
But giving that up, so banks / card cards can send us directed offers, will save you some real money over time. How far are you willing to go how much extra are you wiling to spend to really use BTC? With the Sears MC I mentioned above since I do spend more then $600 a month between gas / restaurants / food stores anyway I am probably going to net back over $225 in total for doing what I do normally. Best I could do normally would be $50 in cash back at best. Either way I can't do that with BTC.

But if a BTC debit card they are came out that would give you good benefits if you let them do a lot more invasive tracking, would you do it?

-Dave

[LeGaulois]

If a person has no problem with the 'invasive tracking' while using a debit card issued by a bank, it shouldn't be a problem while using a bitcoin debit card. Isn't? This is for a person with normal uses (food, gas, etc...).

Unless the person uses BTC for something that should stay totally private (i.e. wants to be anonymous) without invasive tracking, then the person shouldn't use a debit card at all.
Cards are powered by Visa, Mastercard, Discover, Amex, and co. As soon someone uses their product, the tracking starts... No matter if it's used with fiat or cryptos

I don't think I would care to use a BTC debit card if I'm using it to pay the supermarket or stuff like that. There are things you agree to share and the things with which you want privacy. Nothing special to see LeGaulois paying the supermarket, I eat like everyone.
Now, is the percentage high enough to make me use it? If it was with a traditional bank, maybe. With a BTC card, it's something else, because it means more administrative papers for taxes and others (in my country, we need to report every year each account on the exchange platforms, even account closed)

[Leviathan.007]

purchasing via debit cards can be useful for the people who need to also share their personal information in their transactions also this can be useful for the seller whenever he wants to know about their customer information also can be useful if the seller needs to report something to the government for tax and the other related organizations but in the other hand this will put our privacy in danger that's why many platforms are trying to accept and use bitcoin or the other cryptocurrencies. However, I believe we still need both of these payment systems and use the proper one depending on the situation.

[NeuroticFish]

Depends on limits, any cash back offers, and other things.

My "main" credit card gives me not-bad-at-all cashback for every purchase at supermarket. Still, I don't use it every time.
Sometimes I simply spend from the Bitcoin debit card in the supermarket (too) to make sure that at the end of the month I'll be able to pay back fully the fiat credit card.
So imho it's not only about cashback and other benefits, it's also about budgeting and everybody's plans. And Bitcoin's price too.

But if a BTC debit card they are came out that would give you good benefits if you let them do a lot more invasive tracking, would you do it?

For now, in most cases, best would be to see the fees still decrease. I mean, we talk about cashback when we still have cards with 3% or more fees (1% fee + 2% hidden as price difference from exchanges')?
Also I don't really expect them tell you about the more invasive tracking; they'll just do it. And we may just try to use the cheapest without suspecting much why it's cheap.
I've seen to become customary offering cashback not for the tracking they do anyway, instead for holding shitcoins. It's a different perspective. And not a good one.
So as an answer: most probably yes and most probably I would not know it. (And possibly even without benefits in cashback).

[GoodLuckHK]

According to you, debit cards are issued for the convenience of the members of the bank. No one should have any problem while using the debit card provided by the bank. To use it safely, however, there will be no problem when using Bitcoin debit card. Bitcoin debit cards can be used securely and neutrally.
The cards we use are: Visa, Mastercard, Discover, Amex, and the card transactions of these banks are driven by a specific co. As soon as someone uses their product the tracking starts whether the right person is actually carrying the charge by the card. Everything has privacy. This is how it is going.

[odolvlobo]

one thing they do do is allow for a large amount of purchase tracking.

There is no reason somebody couldn't implement something like that when paying with Bitcoin. For example, your wallet could query the company's database using the bitcoin address or LN invoice.

My Amazon card gives me 5% back at Amazon. BoA has a card that gives 3% back on online purchases. Discover has the 5% back on different things every quarter and so on.
Coinbase has their debit card with 4% rewards (not in BTC but some alt) but beyond that there is not much.

Paying with BTC direct we get none of that.
I use BTC a lot, but there are also many many times when I could that I use a card instead due to the benefits the card offers.

Those rewards are not free money. They are paid by the merchants who must then increase the prices that you pay. Many merchants give discounts for cash payments (except where CC companies convinced governments to make that illegal). Many merchants also give discounts when paying with Bitcoin.

BTC does offer some level of privacy
But giving that up, so banks / card cards can send us directed offers, will save you some real money over time. ...
But if a BTC debit card they are came out that would give you good benefits if you let them do a lot more invasive tracking, would you do it?[/b]

Again, it is not free money. The banks, credit companies, and merchants that track you are not being generous. They are trying to suck more money out of you.

[DaveF]

Those rewards are not free money. They are paid by the merchants who must then increase the prices that you pay. Many merchants give discounts for cash payments (except where CC companies convinced governments to make that illegal). Many merchants also give discounts when paying with Bitcoin.

I have not seen any B&M store that gives a discount when paying with BTC
And for the most part for merchants the cost of paying by CC vs cash is a wash.

On the CC side you have CC fees and the possibility of charge-backs.
On Cash side you have incorrect change being given, counterfeit bills, the time cost of counting cash, bank costs for change and the theft potential.

-Dave

[avikz]

Credit card business thrives on partner spending. An average credit card issuer earns around 30% of their profit from advertising such cashbacks and reward points from a partner store. So it's a risk free income for them. That's the only reason we see so many cashbacks and particular type of spending from a particular store.

I want to introduce you to a very interesting business idea of a company called CRED. It's valuation is more than a billion dollar and their main business is credit card data monetization. Go ahead and explore their business model and you will be surprised to know that - for any good thing that comes to you for free, you become the product!

Bitcoin has the power to stop all these! But the moment you use a third party card service to spend your bitcoins, the card issuer starts monetizing your spend data to fill their coffers. If you learn how CRED works, you will understand the entire game here!

So if someone has no issues in being tracked by corporates, they would give up their privacy and use a bitcoin debit card. People who prefer privacy over anything else, they won't!

[DaveF]

So if someone has no issues in being tracked by corporates, they would give up their privacy and use a bitcoin debit card. People who prefer privacy over anything else, they won't!

The point I was making that for most people it's not black or white. It's a big space of gray.

I am far on one side at this point there are many people far on the other.
Quoting myself:

Now I am saying the following, I don't give a shit at this point for me. *IF* I could go back in time I would have changed my habits about BTC & privacy and a bunch of other things 10 years ago. But I didn't, I'm known, and I am far to lazy to spend the time to put my privacy and anonymity back. I am on the old side of 50 and really have better things to do with my time.

Is the 12.5% cashback that the card I mentioned above enough for you? Can you be bought for as little as 2%? [Note not you YOU, the generic you]
If you can use your BTC but get nothing, but using the same BTC through CashApp gets you 4% is that enough?

Just things to think about.

-Dave

[stompix]

Those rewards are not free money. They are paid by the merchants who must then increase the prices that you pay. Many merchants give discounts for cash payments (except where CC companies convinced governments to make that illegal). Many merchants also give discounts when paying with Bitcoin.

When I go into a store and I know that I would pay 100$ with a Wirex card and get 2% in some shittoken back and I would get 12$ with my bank Visa card which one do you think I would use? I don't give a damn the merchant has to jack up prices and thus I'm getting the merchandise with the discount actually at the real price but without it, I would pay extra.
Let's be honest, what real retailers not some online websites with 20 products on stock give you a real 10% discount with BTC over superstore or mall prices?

I want to introduce you to a very interesting business idea of a company called CRED. It's valuation is more than a billion dollar and their main business is credit card data monetization. Go ahead and explore their business model and you will be surprised to know that - for any good thing that comes to you for free, you become the product! else, they won't!

So? Everyone screams that you're a product they have your data they know what you've bought and...and?
They've known I've bought two damn boxes of condoms last week at 3 am when I realized we're out of them, good for card company and the shop and the guy who put them in a box with my name and the guy who delivered, now what? Will I grow a tail or have a microchip implanted or they will control my thoughts?  Look now you know that too....do I need to go to a bunker and fear for my life?

Everyone is overreacting with this privacy thing! We had a fucking book with all the phone numbers and all the addresses of everyone for decades, now poeple get freaked out because they have to enter a phone number to participate in a raffle. There is a thin line between privacy and paranoia and right now it gets trampled a lot.

[NeuroticFish]

And for the most part for merchants the cost of paying by CC vs cash is a wash.

It's really about how good a deal can the merchant make with the bank and/or the card companies.
There was not long ago a little drama about the fees Amazon UK has to pay to Visa.

I have not seen any B&M store that gives a discount when paying with BTC

This could be a good selling point for bitcoin: the merchants could accept bitcoin directly and will not have to pay the CC fees. In theory may even get to give small discounts.
But: bitcoin payments are risky for businesses having everything accounted in fiat and converting bitcoin into fiat comes with fees that may be bigger than the CC fees. And... we've lost the battle before starting it.
And here the CBDCs will come in and will have success, since they're already fiat.

On the CC side you have CC fees and the possibility of charge-backs.
On Cash side you have incorrect change being given, counterfeit bills, the time cost of counting cash, bank costs for change and the theft potential.

Also the cash needs protected, the cash has weight and has to be moved away with costly specialized companies.
It may be overall more costly than CC processing... hence I agree with this: I didn't see supermarkets offering discounts for paying with cash.
(On the other hand many smaller businesses still prefer cash because it helps them at tax evasion, but that's a different story.)

Everyone is overreacting with this privacy thing! We had a fucking book with all the phone numbers and all the addresses of everyone for decades, now poeple get freaked out because they have to enter a phone number to participate in a raffle. There is a thin line between privacy and paranoia and right now it gets trampled a lot.

This! 
Although you're not completely right, since the times have change. 20 years ago it was considered safe to drink from the river; today even tap water is avoided in many places. Not long ago there were the phone books, indeed; now people keep databases with people's data and impersonate or try to scam them. Times have change, and not for the good. So people have to be a bit more careful. Not paranoid, still careful.

[avikz]

So? Everyone screams that you're a product they have your data they know what you've bought and...and?
They've known I've bought two damn boxes of condoms last week at 3 am when I realized we're out of them, good for card company and the shop and the guy who put them in a box with my name and the guy who delivered, now what? Will I grow a tail or have a microchip implanted or they will control my thoughts?  Look now you know that too....do I need to go to a bunker and fear for my life?

They have your spending habit! that's the data they sell to biggies like Google, Amazon and Facebook so that these biggies can serve you advertisements that matches your spending habit. So assume if you are a frequent user of Uber Eats, you will be served with ads from local restaurants and the offers you can get if you want to order food from them. Now let's assume a competitor of Uber Eats has started their operations in your country, so their advertising will be served to you over anyone else because you have shown a steady spend in Uber Eats. Data monetization is a big business which doesn't really cause a severe privacy risk but it really helps in serving right content to the right audience. Anyone working in Digital marketing field, knows that!

Everyone is overreacting with this privacy thing! We had a fucking book with all the phone numbers and all the addresses of everyone for decades, now poeple get freaked out because they have to enter a phone number to participate in a raffle. There is a thin line between privacy and paranoia and right now it gets trampled a lot.

Wouldn't disagree! But privacy is slowly becoming a major concern for the internet savy generation. Facebook and Google have been grilled in the court of law several times over this issue and it is still ongoing! Amongst the big companies, I have seen only Apple has tried to make it either black or white for it's users. rest all other companies are thriving on user data and its monetization.

[stompix]

They have your spending habit! that's the data they sell to biggies like Google, Amazon and Facebook so that these biggies can serve you advertisements that matches your spending habit. So assume if you are a frequent user of Uber Eats, you will be served with ads from local restaurants and the offers you can get if you want to order food from them. Now let's assume a competitor of Uber Eats has started their operations in your country, so their advertising will be served to you over anyone else because you have shown a steady spend in Uber Eats. Data monetization is a big business which doesn't really cause a severe privacy risk but it really helps in serving right content to the right audience. Anyone working in Digital marketing field, knows that!

Very good!
You know something, I'm really happy with that!
Let ^$%^%$ google know that I don't like fast food so they can shove down their ass all the recommendations from McDonald's or KFC or Pizzahut and highlight normal restaurants when I search on a map for the place to eat. I love to actually have results from Asics or Mizuno when I search sports shoes and not some other crap like a fake 1000$ pair of Balmain shoes in the first results.
Again, they know my favorite brands, why should I give a damn if they recommend stuff that I would have bought, either way, If I'm unhappy with those I would search for something else till I find something I like, isn't that how everyone chooses what to buy?

What I don't want others to know is, as an example, for the pizza guy to realize that I have 10 bitcoins in the wallet from which I paid the pizza and I tipped him.
Just how I wouldn't go to the door with a briefcase full of money, grab a ten bill and give it to him, making sure he realizes there is well over 100k there in cash and I'm completely drunk and home alone. 
That's why as strange as it might seem I'm happy to use both mixers and cards depending on the situation for safety rather than cash.
There is much-needed privacy, there is common sense, and there is paranoia.

This!  
Although you're not completely right, since the times have change. 20 years ago it was considered safe to drink from the river; today even tap water is avoided in many places. Not long ago there were the phone books, indeed; now people keep databases with people's data and impersonate or try to scam them. Times have change, and not for the good. So people have to be a bit more careful. Not paranoid, still careful.

I don't know where you live but I wouldn't have drunk water from the river flowing by our village even 40 years ago.  
That aside, being careful and using common sense will save you from far more trouble than not putting your family name on the door and making me ring all your neighbors to find out which is your apartment when you're a moron and you've put your phone on silent and you don't know I'm calling you.

A scammer can know your name your address your height and zodiac sign, that doesn't mean suddenly it makes sense to send 10 000 euros to a bank in Seychelles to inherit a diamond mine in Angola from your uncle you never met.

[NeuroticFish]

That aside, being careful and using common sense will save you from far more trouble than not putting your family name on the door and making me ring all your neighbors to find out which is your apartment when you're a moron and you've put your phone on silent and you don't know I'm calling you.

I do have my name on my door, although, for the safe of GDPR (lol!) many of my neighbors don't. So I know what you are saying.

A scammer can know your name your address your height and zodiac sign, that doesn't mean suddenly it makes sense to send 10 000 euros to a bank in Seychelles to inherit a diamond mine in Angola from your uncle you never met.

Scammers came from door to door 20 years ago too, just a lot fewer.
Nowadays they don't even have to know your name, address or "zodiac sign" (although it can help greatly). I was there when some older relatives got a strange phone call (scam) they were asked to top up a GSM card else they'll lose access to their paid GSM plan (!???!). The scammers have plenty of time and they can try 1000s of phone numbers daily until they find some of them actually working and some older or simply "technologically impaired" people. And they can go on without knowing anything about the target. Having some info can help, but as you said, it's more a mass paranoia lately than actually a constructive protection (which would usually mean education, the thing politicians will usually not improve since it doesn't benefit them).


As said, I don't care if they mine data about me related to what I'm buying. Actually it may even help me on long term, giving a chance those products keep getting produced and sold.
If one doesn't want to do that, he has to ditch all the cards, no matter whether they admit they mine that data or not.

...And ditch the smartphone, and social media, and most e-mails and surf the net with no javascript, no cookies, maybe not even clearnet... and so on. With the current evolution of cameras and face recognition, such people may also be forced to move out of cities/towns. So yeah.. there's a line between common sense and paranoia... (Imho such paranoid people may get targeted in the first place for being different and "they must have something to hide if they do this").

[DaveF]

...With the current evolution of cameras and face recognition, such people may also be forced to move out of cities/towns. So yeah.. there's a line between common sense and paranoia... (Imho such paranoid people may get targeted in the first place for being different and "they must have something to hide if they do this").

Side note, but worth mentioning. Big cities for the most part are actually better for facial recognition privacy then smaller more rural areas.

If you are in someplace like Manhattan with 1 1/2 million people living in 23 Square miles (60 SQ KM) it's easier to be one of the faces in the crowd that generate so much data that has to be dealt with then it is in say Billings Montana with 120000 people in 45 square miles. (116 SQ KM)

Big cities might have more cameras and more people keeping track of them but there is so much information overload that it's actually easier to not be seen.

VERY small out of the way places are even easier. Since there are so few people it's easier to keep track of who is where doing what.

-Dave

[NeuroticFish]

Side note, but worth mentioning. Big cities for the most part are actually better for facial recognition privacy then smaller more rural areas.

Yes and no. If you live in a big city you'll probably either buy online, either go to supermarket, where's not that crowded. And China has shown that face recognition AI doesn't get scared off by big crowds.
The crowd may hide your face 10 times, or 100 times, but one day it simply won't.

Big cities might have more cameras and more people keeping track of them but there is so much information overload that it's actually easier to not be seen.

VERY small out of the way places are even easier. Since there are so few people it's easier to keep track of who is where doing what.

I completely get your point, just my point was out of town, i.e. off-grid. They may know where you are in general, but won't be able to track your life details.
And excepting the owner of one grocery store, the rest of the world won't know what you are buying.

[PrivacyG]

I think it depends.  The definition of 'good benefits' is subjective.  I have already formed a habit of paying more for cash on delivery than I would have to by paying in advance.  I have heard of these discounts, cashback and other type of rewards that you receive by paying with card but I never considered it to be worth my data.  Yes, I do spend a ton more money overall.  Per year, I likely spend hundreds or even thousands more overall just because I want to pay cash.  And I still think it is worth it.

But after all, it really depends.  Say Apple released a new flagship device.  You can pay $799 for it and enjoy your phone or you can pay $499 and have a phone that will force interest based ads on the lock screen, home screen, notification bar and in most of the preinstalled apps.  Would you pay less for it and accept more invasive tracking or do you not think it would be worth the discount?  I, for one, would pay more.

Stompix made a good point above.  There is an issue with direct Bitcoin payments.  You can pay for something and the seller will know how many coins the buyer's address had before paying.  With so few Cryptocurrency users knowing how to actually have privacy with Bitcoin, many would become targets of crime.

So if not clear by now, my answer is the following.  Between accepting invasive tracking for cashback and paying more to be free, the latter will always be my choice.  For my family or for most of my friends however, giving up data for discounts sounds very tempting.

-
Regards,
PrivacyG

[DaveF]

Side note, but worth mentioning. Big cities for the most part are actually better for facial recognition privacy then smaller more rural areas.

Yes and no. If you live in a big city you'll probably either buy online, either go to supermarket, where's not that crowded. And China has shown that face recognition AI doesn't get scared off by big crowds.
The crowd may hide your face 10 times, or 100 times, but one day it simply won't.

Big cities might have more cameras and more people keeping track of them but there is so much information overload that it's actually easier to not be seen.

VERY small out of the way places are even easier. Since there are so few people it's easier to keep track of who is where doing what.

I completely get your point, just my point was out of town, i.e. off-grid. They may know where you are in general, but won't be able to track your life details.
And excepting the owner of one grocery store, the rest of the world won't know what you are buying.

Yes with a but....
In Manhattan there are more then 1100 grocery stores plus 1000s of bodegas where you can grab some food items.
Going back to the Billings Montana example there are under 100 grocery stores / bodegas / etc. And they are much more spread out.

If you are going 100% or at least 98% off grid not to be tracked it does kind of bring up an interesting question. Using the assumption that you have money. Are you better off in the middle of nowhere where you are forced to use what would be a limited amount of stores / services because there are just not that many around. Or in a larger city, that while it may have more surveillance and security and police etc. but you can vary your routine to such an extent that tracking you is just that more difficult.


Back to the subject at hand. I was thinking about CashApp debit card yesterday since they sent me a bonus offer for certain purchases. If you are keeping the BTC / cash / lack of privacy in a closed loop so to speak would that make it better for some people. CashApp / block already knows who you are. If you are suing them in a small subset of locations and never moving any of the BTC that you have there off the platform but just recycling through it would that mitigate the issue for some people?

-Dave

[jaberwock]

Side note, but worth mentioning. Big cities for the most part are actually better for facial recognition privacy then smaller more rural areas.

Yes and no. If you live in a big city you'll probably either buy online, either go to supermarket, where's not that crowded. And China has shown that face recognition AI doesn't get scared off by big crowds.
The crowd may hide your face 10 times, or 100 times, but one day it simply won't.

I don’t think it has anything to do with going out to big supermarkets to buy whatever you need or you have chosen to buy it online, as long as you’re making use of debits cards like the op has pointed out, it can still be traced. It is fiat that we are talking about here, fiat is controlled by the banks and for sure you must have left off some of your information with the banks which means that whatever transaction you’re making with the debits cards they are fully aware of it and would be able to tell you’re the one or maybe suspect you’re the one.

But with Bitcoin, decentralization makes it a total privacy when you’re doing transaction online and even offline or in person.

[adzino]

I would say it is because using Credit / Debit cards are mainstream payment methods, hence we find (they offer) more discounts and cashbacks when paying using cards (fiat). And it's more like they are promoting their card (brand/card issuer) so users keep on using them even after the cashback offer is over. I guess once bitcoin becomes mainstream, we will be seeing the same cashback or discounts when paying with bitcoin. There are already some sites that gives you cashback or discounts when you pay with bitcoin. I think bitrefill and dundle are one of those. Bitrefill gives you back 1% while dundle gives you points based on your purchase.

Those rewards are not free money. They are paid by the merchants who must then increase the prices that you pay.

It's not the merchants that gives the reward. It is the CC issuer. Every time you make a POS transaction the merchant has to pay a small fee. They share the fee with you.