Topic: Bitcoin Merchant Services - Should charge no Fees? (Read 1794 times)

Who is the consumer in this case?  I would argue that the consumer is the store as they are the one that pay for the service.   The end consumer does not have any cost from using their credit card, it is a free transaction to them.

This. The fees will most likely drop over the long-run.

Bitpay "already" charges 0.99%? Up until two months ago they charged 2.69% if you converted to fiat. Things will only get better with scale.

Bitcoin transactions can be sent without a fee, you will just have to wait a bit for it to confirm. Additionally, when you accept bitcoin the buyer has to pay a fee if he wants to have the transaction processed fast, not you. What you pay bitpay for is converting the to FIAT. The nature of bitcoin allowes is to be implemented directly into online shopping systems without having to pay any fees

Business exist to make money, hence there will be fees.

/thread?

If you're happy to take Bitcoin instead of fiat, then there are already merchant services with 0% fees.

Unlike visa and master card, it is very easy for another player to enter the market.  Its just software.  More competition will actually decrease fees.  In 10years time, when BTC is everywhere, the merchant business will be more lucrative, and fees will be lower.

There's no "slippery slope" toward higher prices, rather toward lower ones. The reason can be summed up in one word: competition. In contrast, the credit card industry is far too regulated for new credit card companies to appear and undercut VISA, MC, etc.

There is a huge difference between the Bitcoin market and the Visa/MC market.  The barrier to entry into Visa/MC BACKBONE processing is hundreds of millions of dollars.  All Visa/MC processing is done with the blessing of Visa/MC and pays fees to them to be on the network.  Bit-pay competitors can come with far less barriers to entry.  There could be 10 completly independent processors with differing rates with ZERO relation to each other.   A competitor that just verifies the payment and runs the secure back-end all in Bitcoins with no USD could be done almost any country with near zero regulation.  

Bit-pay charges a fair rate and for most it is less then the electrical cost of running their own server much less the hassle security and bitcoind updates.  But unlike Visa/MC, with some real work, you can accept Bitcoin yourself with no processor in the middle.  That is IMPOSSIBLE with Visa/MC.  

I welcome competitors to Bit-pay and as a consumer of such service I would be interested, but Bit-pay has really earned a position in the Bitcoin community that really is second to none.  No other big Bitcoin business has kept their word, supported the community and been available for technical support like Bit-pay.  

Just looked at your BIPS, that's a nice site with some good ideas addressing many of my concerns of how online processors usually work (or is dictated to by visa)!

Hello Kris

Yes i meant processors not merchants, i always get them mixed up (but i know what i mean  )

I have no problem in companies, and 3rd parties, but i dont think for processing bitcoin there should be a need for them as bitcoin in a way is its own centralised bank (but centralised nowhere).
However, there is a need for 3rd parties, as from what i find as a simple web developer, is that accepting bitcoins is no where near as simple as accepting visa (from an integration point of view)!
3rd parties are making it simpler (or even simple) to accept bitcoins, but merchants are losing one of (or some of) the advantages of bitcoin by doing so, as these 3rd parties rightly want paying for what they do and will also have a right to ask and dictate what their services can be used for (although i agree 1% is much smaller than the visa charges (and hidden charges...) and at least we are not beheld to visas opinions on everything).

I fully support bitcoin processors like Bitpay or yourself, but feel it will be only a bridging gap until bitcoin comes up with "simpler methods".
However this "simpler method" is likely only for the "smaller fish", as you say processor company have much more to offer than processing. Imagine Walmart accepting bitcoins, they would not do it themselves, they would have a 3rd party take care of all the nitty gritty parts, and to make some assurances that their money was safe and that they could have it transferred to them in any currency they like and when they like.

I'm also very interested to see what Bitcoin 0.9 (or grater) will bring. I think it also needs a server side wallet that can be placed into "watch only mode".

You are right that converting to fiat is a problem for most companies, and any ideas that help with that are great. although i also agree with your dream in that "why convert to fiat" would be a much better option.

I always think there will be a place for Fiat though, but maybe not at the place it is today..... The banks may be seen as "evil" or whatever but the "small green pieces of paper" in themselves are not evil, (unhappy) or anything else other than "small green pieces of paper".

best Regards
Ford

Is BitPay gone? A year ago Tony or Steve would have been all over this thread and now - nothing.

Did you mean Bitcoin payment processors for merchants ?

I do agree in what you are saying to some extend, since Bitcoin version 0.9 will bring "Payment Requests" and it will be so much easier being a merchant accepting Bitcoin without using 3rd parties for this. However there is still the question of how to convert this to fiat without incurring price fluctuation. And this is where companies like BIPS will still have a market.

With that said, I am still working on enabling the "world" to go true Bitcoin. Might be a dream, but just imagine? Paying your rent, groceries and receiving your pay check in Bitcoin. Utopia I'll say.

Regards
Kris

I fully agree with you, although of course have no objection to companies making a profit, as this is what "makes the world go around".

In the long run, i dont see there will be a need for any bitcoin merchants and the only reason there is a current need or demand is owing to it being "not simple" to integrate ecommerce sites with the "bitcoin network". Once integration becomes simple (and i hope and think it will become simple) there will be no need for bitcoin merchants .

I think part of the "bitcoin problem" does come from within the bitcoin community, where some people are continually thinking "how can we make bitcoin just like fiat currencies", which i think is totally missing the point and potential of bitcoin.
Fiat currency has worked and still does work extremely well (i.e cash for a bottle of milk) and trying to change this will be an uphill battle.
There are however many as yet un-thought of potentials for bitcoin which can make some things that fiat is not too good at simple. AND i think one of these is digital transactions, that fiat currency has been adapted to deal with, although was never invented to deal with... Credit Card companies have been at the front of this "adoption"

Thre below is an extract from a post made on another thread

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Having dealt with various card merchants over the years, i can honestly say most are right "pain in the arse", play god, decide who can and can not be in business, charge high fees and even higher to the smaller companies that can not afford to pay it (ensuring the bigger companies can always out price them), move the goal posts / change the terms and conditions, hold onto funds for unreasonable amount of time, ask for high security deposits, hold unnecessary retention (to gain interest! that is not passed to the merchant), refund customers without consulting the merchant first or offering chance to defend allegations, and many more dam annoying practices....

Card companies also promote themselves as offering "guarantees against fraud and theft", yet it is not the card company that pays for this, as any refunds are immediately deducted direct from the merchant along with a large claw-back fee, whether it is the fault of the merchant or not (so I guarantee against fraud and theft, not the banks!)

But, there is always PayPal    who are worse than all other card companies put together! ....

As you can tell i'm no fan of "visa like companies"   , which is one of the reasons i am so interested in bitcoins   .

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ultimately these arese hole merchant companies like visa do most of the things they do so they can make more money, even if that is very much at the expense of their merchants.
Imagine how much they make when they take around 1% or ALL money spent world wide on the internet, and then even have the cheek to charge extortionate interest to the people that are spending the money. But hay, their over heads are very low so they can manage to pay out massive bonuses to their staff, while your house gets repossessed  ....

I think the sooner Bitcoin replaces them, the better!

Merchants need to pass on the savings of using Bitcoin vs a credit card to the consumer in order to give incentive to adopt Bitcoin.  Similar to how a bullion dealer has a check/wire price and a higher credit card price.  I think the current BTC fee structure is fine, the problem is the merchant is not passing on the savings of using a system such as Bitcoin on to the consumer.

Bips.me and coinbase FTW <3

We agree, therefore from the launch of BIPS we made it possible to use it's merchant tools for accepting Bitcoin payments Free of charge.
This even includes conversion to fiat. Test it out and let me know what you think ?

BIPS are very nice to merchants... And customers as well, with no fees for eWallet transactions and instant internal transactions to email, mobile (SMS) or bitcoin address.

For the eWallet we do honor standard bitcoin network bids/fees. However with the newest Bitcoin daemon, these are "only" 0.00010000 compared to others taking 0.00050000

Zero fees, no chargebacks and none of the hassle! right ? in the spirit of Bitcoin.

I could go on and on, but I just though this would be a good place to highlight the prominent features of BIPS for you to look over.

It is fair when the merchant service provider converts to fiat for you. Banks will still charge fees, as will miners, and a large provider could not do that forever. If you just want to accept bitcoins the old-fashioned way, you can do that yourself for free. If more people leave their money in Bitcoin in the future, then you have reason to be optimistic.

when accepting visa/mastercard you have no choice but to use a card processing service to ensure transactions complete. you can set up a system where you accept bitcoins and then pay them as wages to employee's thus making it fee free.

you could take your bitcoins, find a localbitcoins trader and transfer to fiat that way, thus being fee free. bitpay is just a optional extra, not an essential tool to transact with bitcoins.

there are far more ways to accept bitcoin for free and still get your FIAT. atleast your not stuck with card processors and forced to pay upto 3%.

i would however agree that the transaction fee's added to bitcoinQT client transactions should not exist just yet. as the 25 bitcoins shared amongst hundreds of miners is more then enough. the combined quarter of a bitcoin for transaction fees shared between the same miners is not really a noticable 'bonus'... yet from the people using bitcoin the transaction fee's are noticeable.

EG 25BTC/100 miners = $22
0.25BTC/100 miners=22c

No, entirely free transaction for everyone just doesn't work. The miners have to get something or they wouldn't do their job.
The point was lower fees, it was never intended to be entirely free. (This is just a big miscommunications by a lot of news, because some free transactions are possible)

I see no point why merchants HAVE to increase the fee, let's hope there will be enough competition in the market to keep the prices down.