Why use crypto, Visa/MC, or any traditional payment incumbent when you can move funds instantly for about a nickel per transaction? If a lending component is required, that can be done independent of payment rails.
https://www.americanbanker.com/news/fed-more-bullish-on-laun...
The reason is that people are willing to spend more using credit cards such that it more than offsets credit card processing fees. And I assume businesses as big and low margin as Target and Walmart and grocery stores have the expertise to figure that out.
So the choice becomes whether to accept the major credit cards at all or whether to only accept cash and debit cards and thus alienate many of their customers.
This might have been true more than 10 years ago. I believe “Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010” invalidated card network agreements that prevented differential pricing between credit card and other payment forms, and the below ruling by Supreme Court stated the merchant can advertise the price difference however they want.
https://www.ftc.gov/tips-advice/business-center/guidance/new...
https://en.wikipedia.org/wiki/Expressions_Hair_Design_v._Sch...
> Discounts to Customers A PCN cannot stop you from offering your customers a discount or another incentive for using a certain method of payment, as long as you offer it to all your customers and disclose the offer clearly and conspicuously. For example, you can offer your customers a discount or a coupon if they pay with cash or a debit card rather than a credit card.
Even if it’s within the rules, presenting customers with surcharges for using credit cards (as opposed to discounts for other payment methods) would probably still alienate many of them.
The only caveat seems to be a $40 fee Target charges if you try to buy something with insufficient funds in your bank account, whereas purchasing directly with a bank's debit card, you can tell the bank to simply deny any transactions for more than your available balance and it wouldn't cost you anything.
But if you always have sufficient cash in your bank account, the Target Redcard debit card with a 5% discount seems like a no brainer if you're not getting at least 5% cash back with a credit card.
Perhaps Target does not simply offer this to all debit card users that don't sign up for the Debit Redcard per an agreement with card networks where Target gets a concession on their processing fees in exchange for not advertising a 5% discount to all debit cards uses?
I do not know enough about the crypto space to feel confident that this will end well, but we do need a faster, more distributed financial system, and part of keeping the world order will to be to help establish a truly global financial system, with all countries at the table so that that the natural interests of people that have heritage to a specific location can balance against each other.
> Article 1, Section 10 - No State shall enter into any Treaty, Alliance, or Confederation; grant Letters of Marque and Reprisal; coin Money; emit Bills of Credit; make any Thing but gold and silver Coin a Tender in Payment of Debts;
regarding the financial system, IMO the GOVT stopped caring about the constitution when they got rid of the gold standard.
https://constitution.congress.gov/browse/essay/artI-S10-C1-2...
The fed's new payment system will not (cannot) offer that capability.
https://cei.org/sites/default/files/John_Berlau_-_Government...
If it's only an electronic USD, ok, useful but added value is rather little.
If, on the other hand there is a pre-defined supply curve/schedule that is out of the hands of the people who open the spigot wide at every hint of an economic downturn, it would really be a competitor to BTC.
- already exists in other forms
- brings little added value (a little less friction)
- brings huge downside (USistan now can see every cent moving and potentially freeze it).Repeat after me the ECON-101 mantra: Nobody is supposed to save dollars. Nobody. It's an intentionally lossy, temporary store of value and medium of exchange. You're supposed to save value. And you do that through investment. USD is not an investment. Currencies aren't an asset class! Rainy day fund? Sure. Otherwise? NO!
Savings is a prerequisite to investment in a very limited sense, but at 2% per annum if it takes you 1 year to scrape together the cash to buy an SPY share you still have ninety eight percent of that value. If it takes you 50 years, ok, yeah, less. But it doesn't take most people 50 years to scrape together checks notes $395 dollars - 2021 dollars! 50 years ago that would be $39.50. And that of course avoids the use of fractional shares.
It's so frustrating seeing this lack of basic understanding of economics here on HN from a group trying to overhaul it at the same time! At least understand before you tear up.
Wages kept pace with inflation, real estate kept pace with inflation (or exceeded in major metros), stocks vastly outperformed inflation. Interest rates fell. Just who do you think missed out in the last 50 years exactly?
Yeah, well ... not so sure about this one.
Most of the folks around me would also disagree, based on personal experience (their purchasing power took a serious nosedive in the last 20 years or so).
I'll grant you this is circumstantial, so I ask: source for the claim?
[EDIT]: and there are folks who strongly disagree with you:
https://dailyreckoning.com/revealing-real-rate-inflation-cra...
Also:
>It says so right on the tin.
I'd also disagree with this.
Many folks I know who are essentially either clueless or simply uninterested in finance are entirely oblivious to the fact that they're being slowly but surely being bled dry via inflation.
You can claim they should pay attention and if they don't too bad, but I'd retort that the system is being disingenuous, especially towards the lower strata of the economic system who are the less likely to understand these things.
Anecdotes are not evidence - a lot has changed in 20 years. Your friends work may no longer be valued as highly by the market, or other social policies like not tying minimum wage to inflation, may have taken a toll.
The BLS tracks this. [1] The fact they haven’t gone up more, however, is a social issue and not a monetary policy issue.
> Many folks I know who are essentially either clueless or simply uninterested in finance are entirely oblivious to the fact that they're being slowly but surely being bled dry via inflation.
You claim ... the fed isn’t telling people inflation is designed to track a 2% target?
I’m sorry that folks are ignorant of how something so important works, but it does so for a reason. When I hop into a car and smash it against a wall, I don’t get to claim “many people are ignorant of how the accelerator works.” Tons of people go to prison for crimes they're ignorant of - that doesn't mean we shouldn't have laws.
This is just an argument for high school home-ec and econ 101 to be mandatory.
The lower strata is the least affected because as I’ve shown wages kept pace with inflation and they’re not saving so there’s nothing to inflate away except their debts. Between the record low interest and debts denominated in dollars of the year of issue, in aggregate they likely stand to gain.
> ... and there are folks who strongly disagree with you:
There are folks who disagree with the curvature of the earth, the efficacy of vaccinations and the existence of birds.
The article you linked suggests based on a taco truck the rate of inflation is 30%, and has trivially sensationalized quotes like:
Between 2010 and now, the Burrito Index has logged a 30% increase, more than *triple* the officially registered 10% drop in purchasing power over the same time.
[1] https://www.pewresearch.org/fact-tank/2018/08/07/for-most-us...
Bitcoin is just the beginning. With private transactions (ring signatures, stealth addresses, shielded amounts), and proof of stake or voting consensus, there will soon be no way for governments to know who is transacting what, who owns what, or restrict the movement of capital.
I’ll give you an example. I moved overseas, and all major brokers (Ameritrade, Vangaurd, Schwab, etc.) refused to serve me because of regulatory burdens. So what should I do? Everything but Bitcoin is illiquid or custodial. The future of cryptocurrency is my capital not being beholden to the whim of custodians and governments.
It, first of all, really doesn't matter so long as it's slow and predictable. I would argue that it should decrease in purchasing power to incentivize investing, and also to account for addition or removal of market participants (population changes) and also to react to shocks.
> Bitcoin serves this purpose well, in ways that real estate, gold, and equities don’t.
Respectfully disagree. 20% daily swings are normal. That's not serving the purpose well. That's utterly un-investable. Is it good for gambling? Totally. Investing? Absolutely not.
> Everything but cryptocurrency is highly regulated, taxed, and custodial.
Yes, this is a bad thing that Bitcoin isn't. It leads to scams, schemes and all sorts of shady garbage that completely distort the market. You've actually no idea whether the price is going up because of demand or because Tethers are being printed. I don't either. Nobody does - well, nobody not named Paolo. Every time printing stops the price goes down dramatically. I believe the DOJ is following up on the scathing NYAG indictment. That's bad, and it shouldn't be contentious to say that.
> Bitcoin is just the beginning. With private transactions (ring signatures, stealth addresses, shielded amounts), and proof of stake or voting consensus, there will soon be no way for governments to know who is transacting what, who owns what, or restrict the movement of capital.
Also bad because terrorism and crime.
> I’ll give you an example. I moved overseas, and all major brokers (Ameritrade, Vangaurd, Schwab, etc.) refused to serve me because of regulatory burdens. So what should I do? Everything but Bitcoin is illiquid or custodial. The future of cryptocurrency is my capital not being beholden to the whim of custodians and governments.
I'm not sure why American SEC regulated brokers would refuse to do business with an American citizen wherever located - after all they're the only ones permitted to. If you're not a US citizen and and now live abroad, there's plenty of other options, like IBKR.
> Everything but Bitcoin is illiquid or custodial.
I'm not sure why you think that's true.
> The future of cryptocurrency is my capital not being beholden to the whim of custodians and governments.
Again, I don't think that's a good thing.
Visa is agnostic to the settlement rails it runs on. Having one more option increases its leverage over its members.
> Why pay visa fees when you can handle the transaction directly?
You're only thinking of cash-like transactions. Add a lender to the mix, where the merchant can seamlessly accept cash the customer doesn't have, and Visa's value add becomes clearer.
Also, most cryptocurrencies have scalability problems, it won't be easy for them to replace traditional payments, because they cannot handle billions of transactions per day.
So this has nothing to do with bitcoin (except inasmuch as any news article with the word "crypto" in the headline will trigger a bunch of FOMO buyers and drive up the price)
Proof of Stake is much greater still. Cardano and Polkadot for example.
It actually just adds more nodes to the network. And of the many forms of botnet malware, it seems one of the less harmful.
Until they lose their money in a scam.
If my cash money gets stolen, i can call the police. If someone scams me, the chance is pretty big the rl scammer is going to be found and it's not unknown to get a refund of banks off it happens digitally.
Crypto currency, as far as I'm aware, is really a magic trick. It's gone and no one can help you.
( Just in case someone mentions bitcoin has transparent transactions. Please lookup bitcoin mixing services first)
+ Shop owners have markers to see if money is valid. Security cameras would have recorded who tried to scam the shop owner.
If something would happen with an atm, I'm sure the banks will refund you. In Belgium, the law says you are only viable to a 150€ loss ( https://www.euromex.be/safety-world/wat-als-ik-het-slachtoff... )
As a contrary POV, i ran an experiment with a magazine online and the most popular article was: "how to recover a bitcoin password" ( not in english though). And guess what, most of them would lose all their funds.
That wouldn't be the case with a bank.