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r/CryptoCurrency•
Silver302

Why would a consumer want to pay with crypto?

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The title gets to the point but I wanted to add some color as well. I'm by no means an expert in crypto or blockchain tech but I believe I have an understanding. I'm sure you'll correct me if I don't. :)

I see the benefits in the various forms that crypto can take such as p2p money transfer, smart contracts etc. However I still struggle with the simple question of why someone would ever choose to pay a merchant with crypto vs their Visa/Amex etc.

By its very nature crypto is decentralized and takes financial institutions out of the payment equation but as a consumer I rely on the protection that my bank gives me when I make a payment with my credit/debit card.

When you look at payments in general, cash has taken a back seat to cards years ago because of the convenience and protection that they offer. If, let's say Bitcoin, is to replace cash, do the credit card issuers still exist? Do they charge merchants to accept their card which is backed by Bitcoin and in turn offer me protection on my payment? How would a merchant deal with the volatility that we see today in crypto?

Apologies if this has been discussed but I couldn't find anything when searching. Thanks in advance for your insight!

Posted Sep 26, 2017, 9:34 PM UTC

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MeCJay12•

So crypto provides more options. Yes you have the security of your Visa/Mastercard when you make those transactions but think of Amazon or eBay. They are reputable sites that provide their own protections from the third party buyers on their sites. If you see a sketch site but you want to buy something off it I image Paypal (or Paypal like services) will eventually pick crypo coins up and provide protection for crypto transactions like they do now with mainstream currency. On other sites you may just want to take the risk to remain anonymous.

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blackwaterbayheroredditor for 19 days•

Nothing's gonna go out if existence. If anything, everything will exist side by side and over time one method might win over the other.

As of now, there's convenience for consumers in using crypto in a few industries. Online gambling for example! You can deposit money, make a bet and withdraw money in the same day. While using credit cards to deposit money is a pain cause they're in different countries and bluhbluh and of you want to take money out you need to wait 2 weeks for a check. I think crypto could also ease webcam sites and their transactions too. For privacy reasons, for ease of deposit. Getting refunds on money you don't want to use. Also webcamers can get their cut that same day. You have to look at your question in case by case bases. Is it easier to pay for a hamburger in person with litecoin or with visa? I don't see a difference. Is it easier to do online gambling with litecoin or visa? Of course with litecoin it's waaaay easier.

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Silver302OP•

I agree that I see the use case in "high risk" industries but it seems to me a lot of people look at crypto as a replacement of fiat in general. Outside of high risk industries and p2p transfers, its hard for me to wrap my head around more use cases as a form of payment. As the consumer there really isn't a benefit to use BTC, LTC, etc at Amazon or a local mom and pop retailer. While the high risk segment isn't small, it doesn't come close to the more mainstream volume through brick and mortar retailers and ecommerce sites.

It makes me question the price predictions by some if the % of overall adoption is small compared to today's forms of payment. Granted even just the use cases we mentioned would spike overall transaction volume a ton.

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blackwaterbayheroredditor for 19 days•

The examples I gave aren't "high risk" you're not buying drugs and shit. You could do those same transactions with dollar it's just easier to do with crypto. They're not silkroad trades!

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Silver302OP•

To a credit card processor they'd be considered high risk, which is what I meant. Legal businesses just with a bigger chance a transaction could be disputed. Sorry for the confusion.

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iChinguChingredditor for 2 months•

I think a new industry will grow around this. Crypto needs mediators, mediators can't interact with instant transfers (it is too late), so I think the age of smart contracts is dawning. This would give multiple confirmations. Retailer Yes, I can see the payment made, yes I have sent it. Consumer Yes, payment sent, Yes, product received in good order

If something goes wrong, both parties would have a nominated mediator. They would have access to the contract and the authority to release funds ... and take a slice for the effort.

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Silver302OP•

Makes sense and it would likely be a more fair system than chargebacks in the credit card world today which heavily favor the cardholder. Make the merchant and consumer pay equal % of the sale to the mediator. Could be tricky to implement a non corrupt system but it's possible.

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iChinguChingredditor for 2 months•

I think if the buyer wants the protection they should pay for it. Or, some sellers may want to offer a better service and so offer it as part of the sale price. I believe the non-corrupt part of the system is viable but it needs some extended services.

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ingressagent•

I look forward to buying things I need with BTC or other cryptos.

That last sent will only be true if I have succeeded at investing in BTC or other cryptos.

If I can buy a $500 thing for $500 of my bank account dollars or buy a thing worth $500 using BTC which was only worth $200-$300 on initial investment then the latter would be an extremely appealing option.

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[deleted]•

[removed]

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