I don't understand how this is interesting in the slightest for online sales. Why would I want to buy a prepaid Bitcoin card and wait for it in the mail instead of just instantly receiving my Bitcoin as soon as I pay for it? And, hasn't it already been done with Bitbills and Causicisuccuisusucss coins?
Because you can't.
You can't you buy Bitcoins using reversible methods such as credit card without markup so large as to make it a novelty. BitBills is effectively defunct and Causicius coins while a very attractive product (I own some myself) is targeting a different market (and at a high premium).
However the reality is that this product isn't really targeting you, me, or any established Bitcoin users. The goal is to provide a cost effective user friendly way for everyday consumer to purchase Bitcoins. Your mother or non-techy friend isn't going to WU money to some guy on a forum (no matter how many +1 he has), or send a bankwire and Photo ID to some exchange in Japan. They simply aren't, that is the reality. So if we want to broaden the base of bitcoin users the distribution channels will need to become more mainstream.
So, here's my suggestion: Push hard to get them into a store. Any store. Then push for more, and more. You'd be a huge step ahead of Bitinstant in the retail environment..! Even if it's just a trial run in a single 7-11 store, or a single slot on the shelf at your local WalMart, or
But that's what I'd be aiming for with these cards.
Getting the product into the stores is the goal but the reality is the local Walmart does what the regional WalMart office does and they aren't going to do any POS purchases that aren't already integrated into their national backbone and that means the proven ability and financial commitment to move tens of millions of units per year. Even what we would consider a smashing success of say hundreds of thousands of units per year would get you laughed out of the meeting.
The situation is the same for most convenience store and grocery store chains. Even the smaller independent stores partner with networks like BlackHawk network to handle their product distribution and restocking. If BlackHawk network doesn't support it they aren't either.
I am not saying it is an impossible goal but there are significant logistical hurdles. Showing investors that Bitcoins CAN be sold in volume to a mainstream audience with manageable amounts of fraud is critical to get the seven figure funding it will take to land the product on a single hook on the bottom rung of a shelf in a major chain.
Exciting. I really wanted some bitbills.
Are you also going to make bank cards and payment cards like bitbills was going to?
It is something we have considered. It would allow us to increase the duty cycle on these expensive digital printers. When not running batches of new cards they could be processing custom "pay cards". The trick is getting it automated to the point that the price point makes sense. We would want to shoot for <$1 per custom card (full custom color front, QR code and address info on the back based on a template in resin black). An alternative would be to include a free "pay card" with any order. I don't really like the idea of a "bank card" because using private keys known by others for long term use is contrary to good security principles. Granted we will know the private keys on Bitcoin prepaid cards but the intent is for them to be used temporarily. I believe a semi-permanent bank card pushes that too far.
How do you plan mitigate the chargeback risk associated with accepting credit cards?
Magic. No seriously all the details aren't going to be revealed at this point but restricted mail delivery, and remote activation will allow us to actively fight fraud instead of rolling over and letting the chargeback mount. One of our investors has active role in debt collection industry and we intend to aggressive fight theft (often called "friendly fraud") which simply isn't possible in online delivery. A charge-back even if successful doesn't eliminate the debt created by the underlying transaction and we intend to seek maximum damages via 3rd party debt collection, legal judgement, and derogatory credit reporting.
How easy will this be for people in Europe? Most similar ideas I've seen so far are usually pretty US-centred.
It will be US-centered at least initially. Our deliveries will be limited to the United States. We hope after launching to locate partners in other countries willing to act as regional distributors.
