I was recently brainstorming possible mechanisms to boost merchant adoption and I had an idea that incorporates our decentralized ethos along with taking advantage of Visa's global network without the risk of being censored by Visa.
We all know bitcoin debit cards are either scams or highly restrictive both in terms of opening an account or daily limits. Not ideal.
My solution looks something like this:
Someone who holds a Visa card (Sally) wants to use her card to buy bitcoin. Someone who has bitcoin (Bob) wants to use his bitcoin to buy a good or service somewhere where Visa is accepted. The idea is for Sally to input her desire to buy bitcoin and then be matched with Bob who wants to buy something with bitcoin. Bobs bitcoin is moved to escrow, the Visa payment information is forwarded from Bob to Sally, once Bob confirms the Visa payment has been made by Sally the bitcoin is released from escrow to Sally. Bob has his payment confirmed and Sally has her Bitcoin.
The Pros:
1)
Sally has acquired Bitcoin online and easily with zero trace that she has used her Visa card to purchase bitcoin, this is good for citizens of regimes or nations that try to ban bitcoin. All Visa will see is that Sally has purchased some completely legal good that Visa allows the purchse of with their card.
2)
Bob has effectively turned his bitcoin into the good or service he wanted to buy without needing Visas permission to use their network to complete the transaction.
3)
Visa can not censor this system. Visa would have no way of knowing when people are using their card for this purpose or not, and can therefore not block these transactions. The only way to censor this system would be to shut down visa entirely or restrict payments to such an extent Visa renders themself unusable for the average user, also I need to emphasize, there is nothing illegal about using your Visa card to buy a legal good or service for someone else.
4)
These pros will far outweigh the cons listed below in regions where purchasing bitcoin is banned as this may be one of the only ways left to get bitcoin. There is nothing illegal about using your Visa card to purchase legal goods for someone else.
The Cons:
1)
Chargebacks will be a problem initially however the end goal is to build a reputation system that ensures the Visa card holder does not reneg on their purchase. Much in the same way localbitcoins ensures the buyer of bitcoin makes good on their fiat payment.
2)
It may be hard to match exact amounts, for example Sally might want to buy $100 worth of bitcoin yet Bob may want a good worth only $90. A solution may be for Bob to post his purchase request and the potential buyer of bitcoin to then choose the purchase request closest to their desired bitcoin amount, or get automatically matched with their closest desired bitcoin amount, which they can then confirm or cancel.
3)
This will see people essentially using their Visa card to make purchases for other people in return for bitcoin, allowing them the ability to see what people are buying. Though given the platform is decentralized this may be a non-issue given the anonymity of the person delivering bitcoin to the buyer, and would further enforce the moral use of this network. Also the card holder will be able to see the details of the payment before accepting it giving them the option to control what types of payments their card is exposed to.
4)
This assumes Visa is only accepted for legal goods and services making misuse impossible. However that does not stop people using a Visa card to pay for less than moral activities i.e. strip clubs etc. The solution to this lies in the reputation system and the card holder being able to see the payment details before they accept the transaction.
5)
This would be suited to online purchases only given the inability for a card payment to take place in-store without the physical card present.
Please discuss the viability of this concept, and if im loony for thinking this could work please let me know.
This is intended as nothing more than a brainstorming session on how we can increase merchant adoption.
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from Bitcoin - The Currency of the Internet http://bit.ly/2J4D4ho
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