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Author Topic: Merchant Adoption  (Read 1493 times)

Chase

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Merchant Adoption
« on: February 04, 2015, 03:18:12 PM »
From Bitcointalk:

Quote from: RJF on January 29, 2015, 05:32:58 PM
Here's something I would like to hear some comments on. I initially posted this in the Digibyte forum since they were discussing the issue but, I would like to see what everyone here thinks:

"I'm hearing a lot of noise about Bitcoin's "flaw" regarding non reversible transactions. This is both a good and bad feature in the protocol depending on what the transaction is for. Perhaps, a solution would be to change the code so the transaction IS reversible for some period of time or, until the receiving party physically accepts it. Thoughts?"

Seems this is one of the holdups for mass adoption although most of that noise is coming from the established money/credit providers. Do you agree?

************

Quote from: Dyna on January 29, 2015, 07:17:25 PM
This is my take and I will try to make it brief. The irreversible feature of Bitcoin is an important security component and a great selling point to merchants. Legitimate merchants stand by their products and services they sell. Buyers have full recourse to a refund of their payments, if they so demand, within some reasonable scope of limitations, either directly or through the court of laws. I do not see this as an added risk exposure to the consumers, but a significant protection for merchants.

Reversible payments will drastically increase merchants’ risk exposure and a huge deterrent to mass merchant adoption. Anonymity, with the exception of certain merchants, is also a deterrent to mass adoption.

Unfortunately, I am having a very busy day and do not have the time to elaborate this further. I will conclude that in the absence of the irreversible feature and a required true anonymity for DNotes my optimism for the success of DNotes would be severely degraded. That is how strongly I feel about these two functions of Bitcoin as a digital currency technology.

*************

Quote from: Chase on January 31, 2015, 04:48:18 PM
I was trying to find an article I had read awhile ago about chargebacks, but haven't found it yet.  It gave the details on things like most reversed transactions are from online purchases, a lot of them are consumer fraud (receiving the merchandise, but saying you didn't), etc.  I'm of the opinion that this ("bitcoin's flaw") is just the credit card companies using this fact as their trump card.  Things will evolve and work themselves out and their argument will become mute.  Some of this can be dealt with on the shipping side ie. shipping insurance to guarantee receipt and in good condition where the customer must acknowledge upon receipt.  Best sellers ratings for reputable online businesses.  Apps that will recognize the addresses of the businesses on your safe list and issue you a warning if necessary, etc.  Who knows, this could weed out bad businesses and bad customers.

I did find this article on how much chargebacks cost merchants:

"The Unknown Costs of a Chargeback"  -   http://www.chargeback.com/blog/the-unknown-costs-of-a-chargeback

*************

Quote from: Dyna on January 31, 2015, 06:10:40 PM
Thanks, Chase. That is an excellent article about the staggering cost of Chargeback. It is a serious burden to merchants and a lot of them are small business owners struggling to find enough money to cover the next payroll. When it is the merchant's fault they should absolutely take every responsibility to make the customer whole and satisfied. The consumer fraud component is the most troubling. If payments using Bitcoin are reversible, the negative impact will be crippling. We can forget about mass merchant adoption. The banks, credit/debit card companies, and the likes of Western Union will win the war. Irreversible payment does not equate to “no refund; all sales are final.” Reputable merchants will stand by the products and services you purchased, irrespective of the form of payment used.

*************

Quote from: DNotes on January 31, 2015, 07:59:01 PM
.5% cost was a bit of an eye opener for me, that is substantial, and reversible transactions would only make that figure grow.

*************

Quote from: SmokeysGardens on January 31, 2015, 09:40:17 PM
     Half a percent is huge!! Especially when it is on top of 2% to 4% of the CC fees themselves. As an online merchant, we pay 10K to 20K a year for the luxury and convienience of taking Credit Cards. That does not sound like a lot, but if ANY line item expense is over a percent, it has a HUGE effect on the bottom line. If I could switch from CC to Bitcoin overnight, my profit margin would be 2% to 4% higher!! That is HUGE in ANY business.
     The "standard" cost is crippling to the bottom line, but chargebacks are another "thing to hate", from a merchants point of view. It does not cost us a half percent, by any means (good customer service here!!), BUT.....a customer can do it within a certain amount of time when using CC or PayPal. So, to me, the merchant, it is kinda scary....NO CC or PayPal transaction is really safe untill a certain amount of time has passed. And we always seem to have "that one person", who will order flowers one day, and open a dispute two days later claiming they have not recieved the flowers yet! Or, simply change their mind, refuse the package, and start a chargeback. It is costly (what do you do with the product that comes back?), and frustrating.
     This is one MAJOR reason I (a merchant) would prefer Bitcoin to CC. Just because a Bitoin transaction is not reversable, in no way means "no refunds". Just because you paid cash at Wal Mart means no refund? Not in any way. It just means the customer cannot "scam" me, or change their mind without notification and just refuse the package. It does not stop refunds. It does make it harder to scam a merchant. The CC companies will jump on this, and claim a bitcoin transaction is not "safe" for the consumer. They will tout the "safety" of using a CC. The consumer does not realize that it is he, the consumer, that pays the CC cost. It is the consumer who pays for the scammers. To me, this is the "big secret". The consumer does not realize the true cost of that little piece of plastic.

Smokey


Chase

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Re: Merchant Adoption
« Reply #1 on: February 04, 2015, 03:23:16 PM »
Quote from: Chase on January 31, 2015, 04:48:18 PM
I was trying to find an article I had read awhile ago about chargebacks, but haven't found it yet.  It gave the details on things like most reversed transactions are from online purchases, a lot of them are consumer fraud (receiving the merchandise, but saying you didn't), etc.  I'm of the opinion that this ("bitcoin's flaw") is just the credit card companies using this fact as their trump card.  Things will evolve and work themselves out and their argument will become mute.  Some of this can be dealt with on the shipping side ie. shipping insurance to guarantee receipt and in good condition where the customer must acknowledge upon receipt.  Best sellers ratings for reputable online businesses.  Apps that will recognize the addresses of the businesses on your safe list and issue you a warning if necessary, etc.  Who knows, this could weed out bad businesses and bad customers.

I did find this article on how much chargebacks cost merchants:

"The Unknown Costs of a Chargeback"  -   http://www.chargeback.com/blog/the-unknown-costs-of-a-chargeback

*********************


Someone was listening to me ;). LOL



"Bonafide Raises $850k to Build Reputation System for Bitcoin"

A startup called Bonafide has raised $850,000 to build a reputation system for the bitcoin industry.

The funding round, which comes from Quest Venture Partners, Crypto Currency Partners and the AngelList Bitcoin Syndicate, among others, is a step towards creating a scoring system for addresses on bitcoin’s network.

Notably, Bonfide.io was included in Silicon Valley’s 500 Startups incubation program last year.

Brian Moyer, the firm's co-founder, said that 500 Startups venture partner Sean Percival saw early on the potential for Bonafide to create more credibility in bitcoin commerce, whether between consumers and merchants, or in person-to-person payments.

Moyer said:

“What we’ve found is that people need to identify with something, whether it’s a person or an entity in the bitcoin ecosystem. People need to be able to see what’s out there.”

Managing reputation

Following a spate of collapsed companies and notable frauds in the space, reputation in bitcoin is now seen as increasingly important in helping the technology to go more mainstream and overcome fears over the digital currency's pseudonymous nature.

While bitcoin addresses can in some cases be tracked and identified with certain persons or firms, generally it is hard to find out who owns a particular address.

So, for merchants and consumers in the bitcoin space, not having solid information about the person or entity they are dealing with can be a problem – an issue Bonafide aims to solve.

Moyer said:

“Bitcoin is desperately in need of having that place for people to be able to demonstrate their validity in the space."

Bonafide does not have a login on its website. Instead, it culls information from social networks and the bitcoin network in order to provide entities, which could be people or organizations, a reputation score.

http://www.coindesk.com/bonafide-raises-850k-build-reputation-system-bitcoin/

Shepherd

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Re: Merchant Adoption
« Reply #2 on: February 04, 2015, 05:21:57 PM »
This is a fairly long article but worth reading. Here is my take away:

1. The irreversible feature of Bitcoin should remain for many good reasons as amplified in this article.

2. It explained why most exchanges do not accept credit card or promote it, as in the case of Coinbase.

3. There are many good reasons why Credit and Debit Card companies should worry about their outdated payment network, credit card fraud, chargebacks, and the extremely high interest they are charging consumers and small business owners.

*************************************



How Credit Card Fraud Sank One Bitcoin Exchange


Danny Bradbury (@dannybradbury) | Published on January 13, 2015 at 13:19 GMT
COINDESK:

One of the biggest problems for bitcoin exchanges and their customers is often making the exchange quick and easy. Exchanges like Canadian firm Virtex made the decision a long time ago not to accept credit cards. Their biggest concern? Fraud, in the form of chargebacks.

In a credit card chargeback, a credit-card paying customer asks the issuing bank (the bank that gave them the card) to reverse a transaction made with a merchant. This can happen for a variety of legitimate reasons. A merchant may not have delivered the promised goods or service, or it may have been faulty. In some cases, a card may have been stolen and used without the owner’s consent.

Sometimes, however, the owner of the card perpetrates their own fraud, by trying to reverse a legitimate financial transaction. It’s effectively a pre-blockchain version of double spending. This can happen a lot on the Internet, where companies are dealing with large numbers of unknown customers half a world away.

Chargeback target
This happened to Joey Rich, who found himself at the wrong end of a steep learning curve in 2010.
Having purchased some coins, he began selling them at a profit. He lost his initial investment of $9,000, though, after his bitcoin exchange, BuyBitcoins.com, suffered a series of chargebacks from stolen credit cards.

He explained that a combination of lost credit card revenues and chargeback fees led to a loss of his funds.

Rich said: “For chargebacks, credit card companies charge fees of $25 to $35 in addition to the reversal of the original payment as a deterrent. So I also got hit with a huge number of those $35 fees, which is especially painful on orders of $5 to $10. As my my bank account went into the red, I started getting hit with overdraft fees as well, so it was quite a fiasco.”

Aside from the lost revenues, one of the nasty side effects of chargebacks is that credit card processors keep score. Too many chargebacks raises flags against your account. Eventually, his account was terminated, and Rich was added to a blacklist. “I didn't really know anything about credit card processing back then, and didn't understand how reversible those payments are,” he admitted.

To make matters worse, he explained that the credit card processor hadn’t deposited the original $9,000 into his account in the first place, due to an administrative error. That didn’t stop them withdrawing $7,000 in chargeback transactions and fees, though, putting him in deficit and incurring even more charges in the form of overdraft fees.

It took him a year to sort it out and limp away with some money. In the interim, he had closed the exchange down while he figured out a way to handle credit cards more effectively. In 2012, Rich reopened the site, this time with identity verification features, including options for users to upload a scan of their driver's license, to log in with their Facebook account, and to be geolocated using HTML5 in the browser (which he claimed is far better than geolocation by IP address).

Successful completion of all these tasks contributed to a trust score, which would help to decide whether a user’s order was processed or not. At this point, Rich was using a different credit card processor.
He said: “Those identity verification requirements helped me to do much better, and I reached about $45,000 in sales in the month of May 2013. However, about $4,500 of those were charged back, resulting in the termination of that account.”

The chargeback minefield

Clearly, credit card processing for merchants is harder than it looks. The rewards are ease and convenience, though, and depending on the customer demographic, are simply too tempting for some exchanges to resist.

Read more:
http://www.coindesk.com/how-fraud-sunk-bitcoin-exchange/

Minty

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Re: Merchant Adoption
« Reply #3 on: March 01, 2015, 02:55:16 AM »


This is the top 10 countries for merchant adoption of bitcoin in September. I couldn't find anything that was more up to date.


Top 10 Nations in Bitcoin Merchant Adoption   

http://cointelegraph.com/news/112561/top-10-nations-in-bitcoin-merchant-adoption

Shepherd

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Re: Merchant Adoption
« Reply #4 on: March 05, 2015, 06:02:54 PM »
Quote from: RJF on March 04, 2015, 09:38:14 PM

Well, it had to happen some day, DNotes on ebay...

http://www.ebay.com/itm/15-DNotes-NOTE-cryptocurrency-counterpart-to-Bitcoin-Litecoin-/111612650940?ssPageName=ADME:SS:SS:US:1120


Quote from Dyna:
 
Sometimes we forget that we live in a capitalist world. Entrepreneur will invest their money in opportunities that could be profitable. As DNotes get better established, there will be many more who will invest in the DNotes ecosystem, just like the way others have invested in the Bitcoin ecosystem. Many things our community wished for today will happen when the time is right.

The main difference about DNotes is that we planned it as a business and managed it as a business from day one. Essentially we have been able to identify weaknesses and potential pitfalls in the system, as well as opportunities and incorporated a system in our strategic plans to overcome or avoid known problems while exploiting our strengths for the best opportunities. As it has already become apparent, we have taken the lead in establishing what we believe to be the most important part of the ecosystem, in order to position DNotes on the best path and grow it to become a dominant force. We call them strategic properties, including CryptoMoms, DNotesVault and our family of CRISPs. They are all strategically linked and will provide very healthy rate of growth in fundamental values to justify the increasing price of DNotes. Collectively, they will be the most effective means of securing mass acceptance of DNotes as a medium of exchange on a global scale. This is just the beginning. We prefer to start small and have a long way to go before pushing for large scale implementation.

Chase

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Re: Merchant Adoption
« Reply #5 on: March 13, 2015, 06:50:27 PM »

There is an interesting article out today on bitcoin merchant adoption.


"Is Bitcoin's Merchant Appeal Fading?"

"Steve Beauregard, CEO of cryptocurrency payments gateway GoCoin, had a different take, suggesting that many merchants haven't yet had a positive enough experience with bitcoin for a substantial uptick in adoption to take place.

"I believe merchants have been widely disappointed by the number of transactions they see in bitcoin," Beauregard said.

He went on to state that "consumer adoption is the problem", speaking out against the 'if you build it they will come' mentality of the bitcoin ecosystem in past years."

http://www.coindesk.com/is-bitcoins-merchant-appeal-fading/

************

I agree with this comment: "consumer adoption is the problem", speaking out against the 'if you build it they will come' mentality of the bitcoin ecosystem in past years."  I believe it could end up being the other way around - If the consumer is holding (as in DNotes / CRISP), the merchants will follow.

Shepherd

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Re: Merchant Adoption
« Reply #6 on: March 13, 2015, 10:07:47 PM »

There is an interesting article out today on bitcoin merchant adoption.


"Is Bitcoin's Merchant Appeal Fading?"

"Steve Beauregard, CEO of cryptocurrency payments gateway GoCoin, had a different take, suggesting that many merchants haven't yet had a positive enough experience with bitcoin for a substantial uptick in adoption to take place.

"I believe merchants have been widely disappointed by the number of transactions they see in bitcoin," Beauregard said.

He went on to state that "consumer adoption is the problem", speaking out against the 'if you build it they will come' mentality of the bitcoin ecosystem in past years."

http://www.coindesk.com/is-bitcoins-merchant-appeal-fading/


I agree with this comment: "consumer adoption is the problem", speaking out against the 'if you build it they will come' mentality of the bitcoin ecosystem in past years."  I believe it could end up being the other way around - If the consumer is holding (as in DNotes / CRISP), the merchants will follow.

*******************************
Quote from: Chase on Today at 07:31:37 PM

There is an interesting article out today on bitcoin merchant adoption.


"Is Bitcoin's Merchant Appeal Fading?"

"Steve Beauregard, CEO of cryptocurrency payments gateway GoCoin, had a different take, suggesting that many merchants haven't yet had a positive enough experience with bitcoin for a substantial uptick in adoption to take place.

"I believe merchants have been widely disappointed by the number of transactions they see in bitcoin," Beauregard said.

He went on to state that "consumer adoption is the problem", speaking out against the 'if you build it they will come' mentality of the bitcoin ecosystem in past years."

http://www.coindesk.com/is-bitcoins-merchant-appeal-fading/

Quote from RJF:

I read that and I think they missed the point to some extent. It's not the huge corporate merchants that will drive crypto adoption, it's the small businesses that will bring the public into the scene. This is a grass roots movement at it's heart and small business taking $$ away from big business will bring the big guys over eventually. Your statement about holding is correct. Once they find out who holds the money, they will do whatever it takes to get us to part with some it.

******************************
Quote from Dyna:

I read that article too but did not get the time to write a post. So far Bitcoin has limited success. However, I must add that Bitcoin, Coinbase and others have done an excellent job in developing awareness and got enough transactions going for others like us to be able to examine real data objectively. My personal conclusion at this point is that given the right environment and conditions, digital currency is a far superior form of payment when compared to credit and debit cards. For local payment it is as good as cash. For cross border transfer it is certainly better than fiat currency.

RJF is certainly correct that the most effective ways to cultivate adoption of DNotes by both consumers and merchants as a medium of exchange is through a grass root movement, starting with small business owners and their employees. Our strategic plan calls for a very complete package that can benefit them in many ways. It is more than signing merchants up to accept DNotes.

Our initial market target is small business owners and their employees from startups to $50 million in revenue, in the United States. This will take a few years to totally kick in but we do expect that DNotes will begin to be used as a medium of exchange starting sometime in 2016.

Few will argue that as a group small business is the engine of job creation. Unfortunately, they have also been adversely affected by mounting regulations, poor economic growth, rapidly increasing health care cost and a constant struggle to fund their own retirement as well as being able to take care of their employees adequately to keep them motivated. Their employees often share their misfortune and pain, directly or indirectly.

This will be a multi-year program with enormous potential to provide multiple solutions to assist small business owners and their employees. Although anyone can participate in CRISP for retirement, it is designed with small business owners as our primary target. We firmly believe that it will help supplement many small business owners underfunded retirement plans. CRISP for Employee Incentive Benefits is specifically designed to reward and motivate employees and promote an awareness that it is mutually beneficial for employees and employers to work in partnership to towards a common goal of an enriched environment that will benefit all participating parties. We believe that this will be a life changing project involving many professionals from different disciplines. A book project is involved to assist small business owners to drastically improve their odds of being successful and profitable, rather than being consumed in a life time of struggle.

Edit: Quote from RJF: Hell, the government offered to give the early Internet to AT&T and AT&T turned them down! It's all happening again, same story, different players. Not too hard to predict the outcome. Only difference is now, the little guy is smarter and wiser and won't let fortune slip away a second time...

Again you are correct. I have been a small business owner all my life. I take this as the biggest challenge of my life to make it happen. This time let us get as many business owners and their employees as possible to benefit from it, before the "big boys" have the chance to take it away.

Have you read about IBM, federal reserve, our central bank and a few big banks are working on a "token" as a currency to exploit the Block chain technology? Here we go again.
« Last Edit: March 13, 2015, 10:11:28 PM by Shepherd »

Chase

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Re: Merchant Adoption
« Reply #7 on: May 20, 2016, 12:44:15 AM »


Interesting / surprising... According to this article, merchant adoption has slowed down somewhat, but consumer use has increased. It also states that "Some experts predict another merchant adoption surge later in 2016 as consumer pressure grows and Bitcoin’s price continues its upward trend".


Six Benefits of Taking Payments in Bitcoin

Read more: http://www.nasdaq.com/article/six-benefits-of-taking-payments-in-bitcoin-cm622912#ixzz499VJFuEU

Chase

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Re: Merchant Adoption
« Reply #8 on: July 21, 2016, 03:25:34 PM »

22 Bitcoin Companies Allowing Merchants to Accept Payments in Cryptocurrency


https://letstalkpayments.com/22-bitcoin-companies-allowing-merchants-to-accept-payments-in-cryptocurrency/


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