very nice but you forgot one thing... what are the rates the customer gets?
a merchant needs to have that priced in as well
You mean, the cost of acquiring bitcoins for the customer? Or "handing through" the cheaper costs to the customer in the form of a rebate?
The former is a good question, but doesn't really matter to the business owner: if his/her operating costs are lower, he/she's happy.
Sure, it doesnt matter to the business owner (as long as the fixed fees for the service per month are zero), but as if there is no incentive for customers to pay via BTC it doesnt really matter.
Which brings us to the latter: if people are reluctant to make use of the new, more efficient payment system, businesses have a simple option - pass through some of the reduced costs to the customer in the form of rebates. As long as the rebate is lower than the saved costs, it's still profitable for them to do so, and if the rebate is high enough, it will attract additional customers that look for the lowest price of an item.
The problem is that BTC is *NOT* more efficient for a customer on a monetary basis. Typical ATM fees are 3-7%, more than even PayPal takes. What else, wire the money to an exchange first? There you got conversion fees as well, not to mention fees to get BTC out of the exchange. So, even if you dont include the risks involved in having to pass through an exchange BTC is currently pretty much the worst payment choice for consumers.
Sure, its nice once you already have BTC, but actually getting the BTC is still far to cumbersome for Joe Sixpack.
