As many customers rarely carry anything but credit cards and debit cards in their wallets these days it is an absolutely necessity for merchants to take these kind of payments.
A blanket of charges are usually pushed out by most payment processors along with a bundle of services, both of which merchants are forced to accept just so that they can take card payments.
These forced charges are pushing an increasing number of merchants into giving its customer discounts on the prices they would normally pay just to pay with physical currency. An example of this is a number of gas stations in the US that are trying to encourage customers to pay in cash by offering lower prices for doing so.
The big question for consumers and merchants alike is whether cheap or even better fraud protection can be found through bitcoin compared to the various payment processors, card companies and banks who cover the costs of protection their customers by each taking a piece of the fees that are charged.
Experts in the payment business believe that for many banks there is so little money made in the processing of payments the difference between processing bitcoins or credit cards would make no difference to them. This in turn would make the possibility of there being lower operational overheads for the merchants an enticing option for the banks themselves.
From a merchants point of view the chargeback, which is where, for a number of different reasons, a payment on a card is reversed, is one of their greatest problems and unfortunately it is something that cannot be avoided. This, however, makes the adoption of bitcoin by merchants an even more interesting proposition as one of its key selling points is chargebacks.
Having to rely on a third-party trust is one of the biggest issue with chargeback and thanks to the cryptography that bitcoin uses to provide increased protection from fraud this sort of trust is no longer needed and because of this there is no longer a need for chargebacks.
At the moment the lack of third-party trust with the bitcoin means that there needs to be a mechanism in place that allows the two parties involved in the transaction to trust each other in order to avoid any kind of payment dispute.
The current way that this is done is by using a peer-rating system that provides consumers and merchants with enough information from other users on the platform to allow trust to form. The current peer-rating platforms available include Yelp!, Uber, AirBnB and a other similar systems.
As there are still only a small number of merchants that accept cryptocurrency like bitcoin this in turn is limiting the number of consumers that use the currency. It does, however, works both ways which means that as the number of merchants allowing consumers to pay for their services or products increases so to does the number of consumers willing to make the change over to bitcoin.
Another method of resolving disputes over payments is the use of an escrow bitcoin wallet which gives a key to the merchant and the consumer then a key to the escrow wallet. This would mean that a payment would take place if the two parties agree to the payment but a mediation following a dispute would be made by the escrow wallet.
