Payment business: comparison between Bitshares and it's competitors

[jakub]

This is why I would like to hear from all of you who have been defending lowering the fees. Don't you believe we can give better service than Paypal or Bitcoin? If our service is superior, people will use it because Paypal or Bitcoin are no longer our competitors – service that they offer is so bad that people don't want to use it anymore.

Of course, right now there is still a lot of room for improvement. But shouldn't we focus on making the product better rather than lowering the prices?

 
Absolutely right.
First make the product work the way it is supposed to work. So it does exactly what it says on the tin.
Let's not try to compensate a badly working product with a low price. If it works badly people won't buy it no matter what the price is.

(I really don't want to start the pricing debate over again here. Just wanted to emphasize that we potentially have the best financial product on this planet.)

[Samupaha]

I love that side by side comparison. That one table says so much. 
I think the challenge is :

1. To communicate these points effectively  - in the wallet and on the website.
2. Make the UI as easy to use as something like paypal.

I guess we could improve this comparison in two ways:
- add debit/credit cards
- remove the micro-transactions criterion (as currently no-one can offer a viable solution for that)
- for some criteria add a bit of explanation in the form of footnotes because sometimes it's not so black-and-white

And we could also make a similar comparison for the online exchange part of our business.

Having those two comparisons - it's quite clear that potentially we are leaders in both the online exchange business and the online payment business.
So we should advertise this straight on bitshares.org.
We have clear advantages so why are we so shy about it?

Right now bitshares.org emphasizes the power of the underlying technology (i.e. Graphene).
But our future customers (i.e. traders, online merchants & online consumers) don't really care about technology - they care about features & usefulness this technology can offer to them.

Yeah, this kind of thinking I'm hoping to see more.

I started this thread more for our shareholders to understand this rather than for customers. We all have to get this first so we can explain it clearly to our customers.

This is why I would like to hear from all of you who have been defending lowering the fees. Don't you believe we can give better service than Paypal or Bitcoin? If our service is superior, people will use it because Paypal or Bitcoin are no longer our competitors – service that they offer is so bad that people don't want to use it anymore.

Of course, right now there is still a lot of room for improvement. But shouldn't we focus on making the product better rather than lowering the prices?

[jakub]

I think something like this should advertised about Graphene:

Graphene creates a new standard where money can preserve the core features of paper banknotes and yet be mobile. Digital peer-to-peer cash has become a reality.
And by digital cash we don't mean a digital IOU (like PayPal) or a detached from financial reality (thus volatile) digital currency (like Bitcoin).
What we mean is a new class of digital assets: price-stable (like PayPal) yet not issued by anyone (like Bitcoin).

[hainasiyou]

?what?  11111

[cube]

Isn't Bitcoin and its clones are offering micropayments?  One can even send btc with zero fee if he/she can wait a few hours.

What I mean is that currently you cannot build a viable business model on that. It works but it does not scale.
We need to wait for Iota or BM's Plasma to sort this out.

I see what you mean.  But how do companies like bitpay (https://bitpay.com/pricing) make a business out of it? 

I am looking forward to more news on Plasma too.

[jakub]

Isn't Bitcoin and its clones are offering micropayments?  One can even send btc with zero fee if he/she can wait a few hours.

What I mean is that currently you cannot build a viable business model on that. It works but it does not scale.
We need to wait for Iota or BM's Plasma to sort this out.

[cube]

Currency free of volatility PP BTC BTS
No significant third-party risk involved PP BTC BTS
Compliance with Central Bank monetary policy PP BTC BTS
Compliance with AML & KYC PP BTC BTS
Customer having choice over service provider PP BTC BTS
Industrial-scale performance & real-time transaction settlement PP BTC BTS
Quick sign-up process & smooth user experience PP BTC BTS
Low transfer fees for online merchants PP BTC BTS
Low transfer fees for online consumers PP BTC BTS
Support for micro-payments PP BTC BTS
Integrated online currency exchange PP BTC BTS
User-issued tokens to support marketing campaigns PP BTC BTS
Environmentally friendly PP BTC BTS

I love that side by side comparison. That one table says so much. 
I think the challenge is :

1. To communicate these points effectively  - in the wallet and on the website.
2. Make the UI as easy to use as something like paypal.

I guess we could improve this comparison in two ways:
- add debit/credit cards
- remove the micro-transactions criterion (as currently no-one can offer a viable solution for that)
- for some criteria add a bit of explanation in the form of footnotes because sometimes it's not so black-and-white

And we could also make a similar comparison for the online exchange part of our business.

Having those two comparisons - it's quite clear that potentially we are leaders in both the online exchange business and the online payment business.
So we should advertise this straight on bitshares.org.
We have clear advantages so why are we so shy about it?

Right now bitshares.org emphasizes the power of the underlying technology (i.e. Graphene).
But our future customers (i.e. traders, online merchants & online consumers) don't really care about technology - they care about features & usefulness this technology can offer to them.

The chart is nice.  One question though. Isn't Bitcoin and its clones are offering micropayments?  One can even send btc with zero fee if he/she can wait a few hours.

[jakub]

Currency free of volatility PP BTC BTS
No significant third-party risk involved PP BTC BTS
Compliance with Central Bank monetary policy PP BTC BTS
Compliance with AML & KYC PP BTC BTS
Customer having choice over service provider PP BTC BTS
Industrial-scale performance & real-time transaction settlement PP BTC BTS
Quick sign-up process & smooth user experience PP BTC BTS
Low transfer fees for online merchants PP BTC BTS
Low transfer fees for online consumers PP BTC BTS
Support for micro-payments PP BTC BTS
Integrated online currency exchange PP BTC BTS
User-issued tokens to support marketing campaigns PP BTC BTS
Environmentally friendly PP BTC BTS

I love that side by side comparison. That one table says so much. 
I think the challenge is :

1. To communicate these points effectively  - in the wallet and on the website.
2. Make the UI as easy to use as something like paypal.

I guess we could improve this comparison in two ways:
- add debit/credit cards
- remove the micro-transactions criterion (as currently no-one can offer a viable solution for that)
- for some criteria add a bit of explanation in the form of footnotes because sometimes it's not so black-and-white

And we could also make a similar comparison for the online exchange part of our business.

Having those two comparisons - it's quite clear that potentially we are leaders in both the online exchange business and the online payment business.
So we should advertise this straight on bitshares.org.
We have clear advantages so why are we so shy about it?

Right now bitshares.org emphasizes the power of the underlying technology (i.e. Graphene).
But our future customers (i.e. traders, online merchants & online consumers) don't really care about technology - they care about features & usefulness this technology can offer to them.

[mike623317]

Currency free of volatility PP BTC BTS
No significant third-party risk involved PP BTC BTS
Compliance with Central Bank monetary policy PP BTC BTS
Compliance with AML & KYC PP BTC BTS
Customer having choice over service provider PP BTC BTS
Industrial-scale performance & real-time transaction settlement PP BTC BTS
Quick sign-up process & smooth user experience PP BTC BTS
Low transfer fees for online merchants PP BTC BTS
Low transfer fees for online consumers PP BTC BTS
Support for micro-payments PP BTC BTS
Integrated online currency exchange PP BTC BTS
User-issued tokens to support marketing campaigns PP BTC BTS
Environmentally friendly PP BTC BTS

I love that side by side comparison. That one table says so much. 
I think the challenge is :

1. To communicate these points effectively  - in the wallet and on the website.
2. Make the UI as easy to use as something like paypal.

[Empirical1.2]

In terms of BitShares as a payment business, it still needs the additional services of a payment processor to appeal to merchants imo.

Yeah, I mostly agree.

The point is until BTS/Partner has an automated BTS to bank processor in place, BTS won't be particularly appealing to merchants imo.
The round-trip cost is also likely to be circa 1% + $0.2, so probably a little bit more than accepting payment for Bitcoin.

So focusing on merchants as a key market to gaining traction right now might not be that successful especially when we don't have a big userbase who will use BTS to buy their products and services yet either.

The referral programme could sweeten the deal & make it more appealing once a partner processor is in place though.

Yes.  We need to fill out the functions of a payment processor and we're working to make that happen.

Cool. ETA?

I'm just wondering, why so many are using merchant acquisition as justification for maintaining the current referral programme parameters when the pieces aren't in place yet and when we have programmes that are already working and ready to generate large referrals at a lower price point like ShareBits.io?

http://www.forbes.com/sites/rogeraitken/2015/11/15/sharebits-ios-launch-bringing-crypto-technology-to-mass-market-solutions/
 https://bitsharestalk.org/index.php/topic,20007.0.html

[merivercap]

In terms of BitShares as a payment business, it still needs the additional services of a payment processor to appeal to merchants imo.

Yeah, I mostly agree.

The point is until BTS/Partner has an automated BTS to bank processor in place, BTS won't be particularly appealing to merchants imo.
The round-trip cost is also likely to be circa 1% + $0.2, so probably a little bit more than accepting payment for Bitcoin.

So focusing on merchants as a key market to gaining traction right now might not be that successful especially when we don't have a big userbase who will use BTS to buy their products and services yet either.

The referral programme could sweeten the deal & make it more appealing once a partner processor is in place though.

Yes.  We need to fill out the functions of a payment processor and we're working to make that happen.

[Empirical1.2]

In terms of BitShares as a payment business, it still needs the additional services of a payment processor to appeal to merchants imo.

@merivercap

How many merchants accept crypto payments without the additional services of a payment processor?

The transfer fee by itself may be competitive for merchants in isolation. The question is how easily & frequently can merchants get
BTS/Smartcoin payments into their traditional bank account and what is the total round-trip cost? That is the service you are competing with in the merchant space. 

BitShares/Partner would have to offer both a BitPay type competing service and do it for less than BitPay https://bitpay.com/pricing

Without that service you have limited value to most merchants.

Yes gateway functionality for merchants are vital.  We can be a processor like BitPay & Coinbase, but essentially they both act as a gateway and so we just have to connect merchants with gateways.   We can use CCEDK, BunkerLabs and other gateways as they come online and provide the same type of service very easily.   We can even partner with BitPay/Coinbase who have merchant relationships and convert via Bitcoin ..or partner with other traditional merchant processing companies like Heartland.   There are a variety of different business models you can use...Bitpay/Coinbase have raised tens of millions so they have much more flexibility,... they both essentially charge 1% for larger businesses, but make it free for smaller ones...  (Despite raising $30 million Bitpay doesn't seem to be in great shape partly because people really just don't spend Bitcoin.)  Bitcoin is volatile and people don't like spending it so I don't think Bitcoin processors are a direct competitor.  Smartcoins are far more convenient and have far more potential than Bitcoin in the payment space.

Yeah, I mostly agree.

The point is until BTS/Partner has an automated BTS to bank processor in place, BTS won't be particularly appealing to merchants imo.
The round-trip cost is also likely to be circa 1% + $0.2, so probably a little bit more than accepting payment for Bitcoin.

So focusing on merchants as a key market to gaining traction right now might not be that successful especially when we don't have a big userbase who will use BTS to buy their products and services yet either.

The referral programme could sweeten the deal & make it more appealing once a partner processor is in place though.

[Akado]

@xeroc is this feasible? Seems like it could be a good idea

technically feasible: yes
economically feasible for the DAC: definitely not long term .. that's why it has to be a limited-time offer!!

@xeroc that's why they would need committee or witness approval first  makes sense right? This means it can be a limited offer as long as the community agrees so and community will always prioritize profitability of the DAC. So we might have a solution! Would like to see other people's input on this.

@pc see carpet ride

[carpet ride]

What most people seem to be forgetting about this fee reduction is, once you reduce it, there is NO going back. People just won't accept increasing the fees even if just a little. Even if the amount if insignificant.

That's not true. The BTC community have accepted that they must use higher fees when there's a TX backlog.

price changes upward are often extremely difficult on customers psychologically.  there are studies available on Google. 

The goal here should be profitability - fighting for thin slices of margin when it's not necessary is not capitalistic.

[pc]

What most people seem to be forgetting about this fee reduction is, once you reduce it, there is NO going back. People just won't accept increasing the fees even if just a little. Even if the amount if insignificant.

That's not true. The BTC community have accepted that they must use higher fees when there's a TX backlog.