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Comment by CryptoJunky | Hacker News Reader

I can think of a few reasons... A new approach some merchants have taken is to accept only Bitcoin and thus eliminate payment processing fees. This leads to prices lower than their competitors can reach (stores such as Bitcoinstore.com and Bitcoinin.com). While the 2-3% may not matter much on small purchases, larger orders certainly will.

Another aspect is the peer to peer nature of Bitcoin. With Bitcoin you have the ability to send money to any other Bitcoiner, anywhere, instantly. That simply isn't present with traditional currencies. Now there are some inherent difficulties there. For instance, if I need to send money to my family on the other side of the country I can do it instantly, but they still need to be able to translate Bitcoin to whatever good/service they need. Currently that may require translating it into their local currency by some means, as not all that many local/physical merchants accept Bitcoin yet.

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>A new approach some merchants have taken is to accept only Bitcoin and thus eliminate payment processing fees.

Don't count on it. Processing services will rise up to automate various aspects of bitcoin transactions, and you'll still pay those fees.

There are already several such services, the most major being Bitpay. However, with their software as a service model they don't charge a percentage of every transaction, but rather a small recurring fee for using the service. Thus as transaction volume increases costs per transaction decrease.

The major cost for current payment processors (i.e. mastercard, paypal, etc) is that they end up third party mediators in disputes regarding chargebacks. The Bitcoin protocol, which inherently disallows chargebacks, eliminates much of that need, thus the fees decrease. What you're paying for with Bitpay or Coinbase is a piece of software that interacts with the Bitcoin protocol for you, not a traditional payment processor that ends up mediating disputes.

> but rather a small recurring fee for using the service. Thus as transaction volume increases costs per transaction decrease.

That's not scalable. There are plenty of merchants out there where bandwidth and server costs alone would exceed the $30 for their "Professional" package. They're going to need to raise their prices.

> not a traditional payment processor that ends up mediating disputes.

Someone is going to have to deal with disputes, and if that is you rather than a payment processor.... Well, I wouldn't want to be in that position. The reason someone will have to, is that otherwise you will be hit with (and lose) lawsuits - most countries have some degree of consumer protection for distance sales, many countries have very extensive protection.

It is in no way clear that this will end up being any cheaper than a card processor.

I'm all for Bitcoin, but I don't see (lack of) fees as a very compelling feature.

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