I think in five years, the idea of using credit or debit cards for electronic transactions will seem slightly ridiculous, sort of the way using snail mail to pay bills by check seems now.
Not every online transaction requires a chargeback. Perhaps donating to your favourite artist, author, charity would be easier in Bitcoin. And would mean you don't have to keep careful track of your spending to avoid huge interest rates from the card company.
Paying bills over the internet was easier and simpler than paying by check. Paying by credit and debit cards are easier, safer and simpler than using say Bitcoin.
There is zero chance that those cards are going anywhere. If anything the popularity of PayWave and other NFC technologies should see their use increase.
Except its now legal for merchants to tack on a surcharge for you paying with credit (as it should be).
Online merchants will absorb the cost of processing credit cards, as they aren't going to wait for a check in the mail. But physical merchants that can accept cash and are now allowed to recoup that 3%? I can see certain groups of people migrating away from plastic if it increases the cost of their goods/services in a meaningful way.
Adjusting for a 1% cash back that's only 2% surcharge for the ability to dispute charges, pay at the end of the month. VS: Risking a Bitcoin wallet will zero recourse if something goes wrong and an unstable currency.
The way I see it Bitcoins are not stable / safe enough for large transactions and the transaction fees on small transactions are effectively meaningless.
Almost sounds like you're confusing escrow with insurance?
Your refund would come from the middle guy entrusted to securing your funds until your goods were delivered as promised. If your goods are not delivered, or if what you ordered was nothing like what was promised, the escrow service would simply send your bitcoins back to you, instead of sending them to the merchant who tried to defraud you.
These services would likely charge a transaction fee for the service.
Even silk road offers an escrow service that is apparently effective enough. The scammers on silk road typically try to con you into closing the transaction before delivery of any goods, so one red flag that you may be looking at a scammer is a number of early settled transactions in their history.
If someone wanted to do something like this more mainstream, they could develop a third party bitcoin escrow service that offered an order history, rating or feedback system, and transaction comments from both parties. You could even develop a rating score formula similar to a credit score, where older accounts with more history, have higher scores, which make it much harder for scammers to use throw away accounts.
A lot of places that accept Bitcoins use BitPay and get paid in US dollars. BitPay charge a 3% fee for this service. (You can accept Bitcoins and exchange them yourself but then you take on the exchange-rate risk, which is quite substantial given how much the Bitcoin exchange rate varies.)
They must've changed it at some point and I only found outdated information, sorry. As wmf points out the total fees are actually 2.69% once you take into account the 0.99% fee for the payment gateway part.
BitPay charges a fee to accept BTC and another fee to convert to USD; these add up to 2.69%. If the customer pays Coinbase 1% to convert USD to BTC then total fees are nearly 4%.
> if it increases the cost of their goods/services in a meaningful way.
You do realise that credit cards aren't some new invention ?
The merchant costs have been factored into people's purchases for decades and there is no evidence it has caused any impact on sales. If anything the huge array of reward programs and partnerships e.g. with airlines has reinvigorated the huge of credit cards.
I just don't see anyone migrating away from credit/debit cards apart from fringe elements of society. Seems like proponents of Bitcoin live in their own world sometimes and treat the existing financial system as some competitor.
