[alchemist1e9]

You are obviously completely unaware of the popularity of Paypal, CashApp, Venmo within the general US population and of Square for POS by vendors.

The value proposition for everyone, consumer and vendors is both lower fees and ability to easily diversify their income/assets into non depreciating digital assets.

Somewhere there is a Steak n Shake presentation that explains their investment into accepting Bitcoin (via LN) has already paid for itself in fees.

[fnordpiglet]

The issue is that for Steak ‘n Shake it’s fine because in the card network scheme they’re generally on the hook for repudiated transactions. So they pay fees and on top of that have charge backs from fraud. For you as a Visa card holder you benefit from that situation though because if your card is stolen you can claim fraud or theft and the merchant is often loss liable.

In your world you would be the one holding the loss if your card is compromised in some way. This is of course beneficial to merchants. But as a customer I would always prefer a card network backed transaction all things being equal as my personal loss liability risk is considerably lower - almost non existent. This is why credit cards are generally better for the payer. I have no incentive other than ideological to use any crypto payment method.

PayPal, Venmo, Cash App tend to not be merchant based transactions but cash like transactions by either people that are unbanked for whatever reason, or doing business person to person, or transacting with a merchant who doesn’t accept credit cards. Stripe (and square) make the logistical side of that less an issue than it was, and today it’s mostly about fees and loss liability transfer back to the originator of the money (as in a theft scenario it’s not the payer whose money is at risk).

[alchemist1e9]

Steak N Shake accepts Bitcoin, both on-chain and via Lightning Network.

Paypal has USD savings accounts that pay interest, ACH support, and also issues standard credit cards if you like. On top of that they support multiple major cryptocurrencies and allow instant conversion to USD.

A high percentage of restaurants and stores in my area now accept CashApp payments directly along with other payments. Many people are using PayPal and Venmo also with merchants in person, and online Paypal is dominate.

Square is in the process of rolling out Lightning Network Bitcoin payments to all it’s POS terminals later this year with the merchant having control over how they want to handle such payments, auto convert, partial convert, custody Bitcoin. Could get interesting fast if merchants start offering discounts for non-credit card transactions, which they are fortunately now allowed to and the credit card companies can’t terminate them, what happens when USD stablecoin or Bitcoin payments are offered further discounts by the merchants due to their cost savings and preference?

I’m thinking about moving all my ACH auto pay payments over to either CashApp or Paypal also. And remember they both support ACH direct deposits.

What services are left for the traditional bank to provide me? FEDwire and international SWIFT wires … and … investment accounts for stocks and bonds …

I’d say they are on shaky ground as I know crypto focused companies like Coinbase are looking at how to get into traditional equities and bonds and guess what Robinhood already does that and has gone the other direction and acquired crypto companies.

The bigger mystery in all this discussion is why such a significant fraction of HN readers and commenters are so out of touch with what is happening in the real world and real economy with these systems?

[fnordpiglet]

I think I touched on all this. These are advantageous to merchants for low fees and loss liability assignment. They offer very little to the payer who is banked and has credit. Of course more merchants are accepting payment methods that are highly advantageous to them, and the payment processing providers capture a better interchange by cutting out the middle men. But the person whose money is being used to transact gains nothing in this and loses repudiation (along with other incentive perks card issuers often provide for their interchange share). This was my point, and I don’t see any addressing of it. For the person paying (you) you literally gain nothing and lose card network loss insurance and other perks.

For bank transfers, again, you gain repudiation. You have a window during settlement to dispute the transfer. It’s short but it exists. This is seemingly inconvenient and not obviously useful until someone is trying to steal your money. Then it’s suddenly very useful.

As a general society the friction that transfer hold periods provide generally globally reduces financial crimes everywhere and provides global stability to the financial system that didn’t exist prior. These seem like stupid fuddyduddy things banks do but there was a time these didn’t exist and there was a reason they were created and that time was not a better time. It was materially worse for everyone everywhere. Having never existed in such a time makes it hard to understand that such a time might have existed and why it was bad - but for those interested there do exist books that explain how we got here.

[Karrot_Kream]

The consumer benefit would be when merchants start charging lower prices to payers if they use crypto. For example, I know many small businesses that offer lower prices, some on purchases as large as $9k (below AML limits), if paying in cash because it's easier to declare less in taxes when using cash. Likewise if a merchant realizes that they pay lower fees and have lower loss on stablecoin transactions, I can see a world where merchants offer discounts for those transactions.

Obviously time will tell if there's enough margin to even offer a valuable discount to the purchaser and if merchants will become savvy enough to offer this dual pricing scheme.