What can a cryptocurrency do that Visa, Mastercard & American Express cannot do for your online business?

I would venture to say that most online buyers use a credit card to pay for their purchases. If you are the cardholder, that is great! Your bank and credit card company will say they are there to protect you -- which they should; since you are dishing a lot of cashola for that shiny platinum premium card annual subscriptions, or the even more expensive carbon-fiber black card with even more exclusive privileges. They provide a valuable service and they are very convenient to use whether shopping online or just paying for dinner.

The customer is always right

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But did you ever wonder what happens when something goes wrong? The issue comes when your credit card number gets cloned or stolen and you get charged for a shopping spree at Home Depot, Target and a super expensive restaurant in Miami. That is when you call your bank/credit card company and reject all the charges -- because it was not you making them. For the most part, the companies will side with the customer and either put a hold on the transaction and even reverse the charge for you while the issue gets resolved with the vendor.

Customer protection equals loyalty.

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Usually, your bank and credit card company do a very good job at fulfilling their promise to you and you eventually get all your money back, and they will reverse all the charges. I had my credit cards for more than 20 years and I have been a loyal customer because they protect my interests -- aka my money and my credit, and my credit card number has been stolen/cloned more times than I feel comfortable admitting to no fault of my own.

But did you ever wonder what about the hundreds of merchants who served all that expensive wine and lobsters in Miami thinking it was you celebrating with your friends? What about the small online shop where your card was used and those custom-made earrings where shipped to your fake-you? Well, the short answer is they are the ones carrying the burden.

The credit card processor policy: reverse the charge first ask questions later.

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If you are a merchant that accepts credit cards, most often you need a credit card processor. In short, they take the cash from your customer and deposit it into your bank account minus a few fees. That works well most of the time, until a cloned credit card transaction comes across, in which case the credit card processor will take the cash out of your bank account and "process a reversal of the transaction" -- and yes they are allowed to do that for up to a year after the transaction was executed... read the fine print in your merchant processing contract.

What are the alternatives?

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There are some alternatives to prevent this type of fraud. If you are a bricks-and-mortar store, you can always use cash (we will not get into the particulars of cash like counterfeiting, or your own staff misplacing a few hundred dollars here and there). But if you are an online store you can not use cash. An alternative you might want to consider is accepting cryptocurrencies such as bitcoins or ethereum.

Why accepting cryptocurrency is better than accepting credit cards for online transactions?

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Payments in cryptocurrencies like bitcoin (BTC) or ethereum (ETH) are better because they are irreversible. Once the transaction has been confirmed by the network, you got your payment and there are no reversals. The blockchain is immutable, no one can take your money.

The bad news is that crypto wallets are not as prevalent or widely accepted as credit cards are today. Just ask around how many people in a room have a credit card on their wallet vs how many have a crypto wallet (even though the vast majority are free and pretty easy to use as an app on your phone).

Who will drive adoption of cryptocurrency?

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Consumer have a solution in their pockets already, they have cash and credit cards. They are not the ones feeling the pain and neither are their banks or Visa, MasterCard or American Express, those guys are making millions off dollars on transaction fees... they are happy as a clam could be. It is the online retailers who have the problem, and it is the retailers who need to start changing the habits of their consumers to prevent the millions of dollars lost to credit card fraud.

If you are an online retailer, look at your numbers (related to credit card fraud) and I will bet you will be surprised about how much money you have lost. Do you know how much did your merchant processing took back out of your account last year? How about this year so far? What if that money still was in your account today?

Cryptocurrency is not hard, you already know how to use it.

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If you know how to use Venmo, PayPal, Square, Snapchat, Facebook, WhatsApp, Tinder, Instagram or Twitter, you already know how to use a crypto wallet in your phone. Just download a reputable wallet like MyCellium, Blockchain, Xapo, Ethereum or Jaxx If you are a retailer, you might want to try Coinbase.

The most important step is to get educated on this new technology, because it will save you lot of money in the long run, and that is something Visa, MasterCard or Visa cannot do today.

If you want to learn more about how using cryptocurrencies can save you money, contact me via LinkedIn https://www.linkedin.com/in/powermeza/