[abalone]

I agree with all those points, but the key question is whether the virtual currency community can come up with something significantly better to offset the considerable adoption costs.

Another consideration: whether the entrenched players can simply make minor adjustments to counter that threat. For example, take your first point, filling out forms. It used to be you always had to do it. Then contactless payments took off in Asia. There was all this buzz about NFC and how it was going to disrupt the system and mobile carriers were going to get involved and so forth. So what did Visa/Mastercard do? They just relaxed the rules so that swipes under a certain amount don't require a signature. Poof, there goes the opportunity, because there's no way the cost of an NFC rollout is worth the extremely minor difference between a swipe and a tap. (Go ask Google Wallet.)

And so it goes for most of the technical issues, I think. Trust and security too.. you could make it easier on the merchant, but at the same time harder for consumers to recover funds if they "did something wrong" like installed malware.

Excited about the new frontiers into digital cash though. And also scared too. The biggest use case for bitcoin right now is not payments. It's international money transfers that skirt capital flight controls. And, for us non-libertarians, it ought to be a big concern. It's a profoundly anti-democratic force. It gives the wealthy minorities (esp. in third world countries) a veto power over policy. Don't like some new environmental or safety laws, or higher taxes to fund public education and health? Just transfer capital out of the country and watch it wither.

[XorNot]

More importantly: NFC happened anyway.

Pretty much all my local merchants have machines that accept NFC payment taps - to the extent that the Commonwealth Bank has an app for the Galaxy S4 which will emulate a debit card tap and be accepted by any machine.

The only time I end up keying a pin or signing is usually when the staff themselves don't realize that I can just tap my card (the machines have big NFC icons on them, but they don't offer the machine to me to tap).

[abalone]

You might consider that the reason staff don't realize you can tap is that nobody uses it, because you can just swipe without a PIN for small purchases. I am not saying this is superior, just observing an example of how even changing consumer behavior is difficult when the value add is minor.

[XorNot]

No in this case it's because they don't present the reader to you - they punch in the sale, then ask you to hand them the card and swipe it.

Also in Australia I've not seen swipe without PIN used very much - a swipe usually requires a pin, whereas tap does not (and is also a lot faster).

[abalone]

Australia has different rules. In the US at least, the PIN is not required for small purchases.

It's interesting you mention Australia because they've taken a different approach to the fee issue. They regulated it away. Cards cost merchants very little. Didn't need bitcoin to do it, just passed a law.

Also interesting: it did not result in a lowering of consumer prices. The merchants kept the windfall.