
PayPal president David Marcus: Bitcoin is good, NFC is bad - a3voices
http://news.cnet.com/8301-1023_3-57615080-93/paypal-president-david-marcus-bitcoin-is-good-nfc-is-bad/
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cs702
_" I really like Bitcoin. I own bitcoins."_ \- David Marcus, President, PayPal

He adds: _" People are confused. They think because it's called cryptocurrency
it's a currency. I don't think it is a currency. It's a store of value, a
distributed ledger. It's a great place to put assets, especially in places
like Argentina with 40 percent inflation, where $1 today is worth 60 cents in
a year, and a government's currency does not hold value. It's also a good
investment vehicle if you have an appetite for risk. But it won't be a
currency until volatility slows down. Whenever the regulatory framework is
clearer, and the volatility comes down, then we'll consider it."_

I agree with him that Bitcoin is a ready-made solution for people living in
_less stable economies_ who want to diversify away from their (risky) local
currency, particularly if they find it difficult or impossible to buy US
dollars or euros through their local financial system.

Would you rather own (a) savings in a bank account denominated in a "soft"
currency (whether Argentine pesos, Bolivian bolivianos, Libyan dinars, North
Korean wons, Syrian pounds, Venezuelan bolivares, or some other one), or (b)
bitcoins, which, despite their recent volatility, are used globally[1] and do
not require trusting a third party?

\--

[1] [http://getaddr.bitnodes.io/251/](http://getaddr.bitnodes.io/251/)

~~~
gasull
I would rather have bitcoins than any other currency for my savings. For
spending, you just need the local currency, since Bitcoin isn't accepted in
most places yet.

~~~
lukev
Really? For your _savings_? Bitcoin is many things, but a low-risk investment
is not one of them.

~~~
alexmat
People have varying risk tolerance. For someone who is young, travels a lot
and has several sources of income, Bitcoin is an attractive option.

~~~
acjohnson55
If your risk tolerance is having vastly different amounts of wealth over the
course of the day...then sure.

~~~
alexmat
On a day to day basis sure, but over weeks and months, the trend has been
positive. As long as you purchase bitcoins well in advance of when you need to
spend them, they have historically preformed very well even with all the
volatility. Assuming you buy into the idea of network effect creating a
positive price feedback loop, it's a reasonable place to stash cash that you
may need on short notice or when traveling abroad.

For reference:
[http://bitcoincharts.com/charts/bitstampUSD#rg1460ztgSzm1g40...](http://bitcoincharts.com/charts/bitstampUSD#rg1460ztgSzm1g40zm2g25zvzl)

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ck2
And taking 14% of every sale on ebay must be awesome for them.

Was kinda hoping Bitcoin would finally be the micropayment system that
kneecaps them.

~~~
rthomas6
All ebay has to do is accept bitcoins.

What is stopping something like this? If Ebay uses a service to convert
directly from BTC to dollars, there's no volatility risk. Is it fear of bad
press? Fear of angering existing players like Paypal? Is it logistics? I'm
biased, but why wouldn't Ebay accept an additional form of payment for free?

~~~
etanazir
Why not use 'litecoins' or create their own virtual cryptocurrency? That is
the achilles heel to bitcoin - bitcoin 2.0 an infinitum.

~~~
rthomas6
Sure, accept all of them. Why not? It's trivial to accept them, the only
difficulty is the volatility compared to dollars, which for Bitcoin is a
solved problem.

~~~
JoeAltmaier
Confused; Bitcoin remains totally volatile. What was solved?

~~~
rthomas6
Merchants don't have to hold Bitcoins to accept them as payment. Several
services exist that convert Bitcoin payments directly into local currency,
allowing merchants to accept Bitcoin without exposing themselves to its
volatility.

See: [https://bitpay.com/](https://bitpay.com/)

~~~
dllthomas
Someone has to want them, with sufficient reliability.

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calpaterson
I think NFC payment is more compelling in countries like the UK where you
cannot swipe a card, you have to insert it and then enter your PIN (all or
nearly UK bank cards are two-factor). For payments smaller than ~£15 though,
you can just use NFC, which is a lot quick, especially for crowded pubs.

~~~
treerock
You can do this with bank cards[1][2] in the UK. I've seen them used in
Gregg's.

[1]:
[https://en.wikipedia.org/wiki/Contactless_smart_card](https://en.wikipedia.org/wiki/Contactless_smart_card)
[2]:
[http://www.bbc.co.uk/news/business-18265388](http://www.bbc.co.uk/news/business-18265388)

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JimmaDaRustla
Um, what? He makes NFC sound inconvenient to customers - how can you be more
minimalistic in approach other than just pressing two devices together and
having the transaction complete seconds later?

I think he may be on to something - there is the current development of
presenting cards by an NFC enabled device, like a phone. This is a huge
process to get the virtual card to the customer securely - one of the abstract
approaches, which I don't think is really being taken seriously, is
virtualizing the card communication in a cloud, so the card is never
downloaded or emulated on the device, like an Android phone. This is kind of
leaning towards an "invisible" transaction he speaks of, where a secure
payment could be done as an after thought without an actual device or
interaction?

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brownbat
"It's not a question of whether people at a payment terminal would prefer to
tap or swipe, he said, but a reality that people don't want to go to a payment
terminal at all."

I think this is right. The amazing future doesn't change what I get out of my
pocket. The amazing future lets me walk into a store and just walk out with
things without stopping, while some computers in the background just make sure
all accounts are settled.

~~~
JimmaDaRustla
Truth be told, merchants don't want that risk. Merchants don't even want NFC -
they want payment to be made securely and not have negative impact on their
customers.

~~~
seiji
Apple Stores allow you to walk in, scan an item with your phone's camera, pay,
put the item in your backpack, then walk out without talking to anybody.

There's a limit ($200 max on phone self-checkout), but they don't seem
concerned with shrink.

~~~
JimmaDaRustla
I work in the smart card payment industry for a large north american bank.
I've been in conferences with actual merchants voicing their concerns. I
didn't make my observations sitting at Starbucks.

~~~
seiji
Starbucks is a great example of another company that allows payment without a
card or NFC, though you still go through the checkout person.

~~~
JimmaDaRustla
And also more secure than traditional payment methods since it is prepaid and
the merchant is guaranteed not to be frauded.

What merchants don't want, typically, is added customer convenience to payment
methods IF it adds additional risk for fraud. EMV Chip has been a huge
success, and NFC is kind of a step backward because anyone can steal a NFC
chip card and make small purchases, which means merchants still need to
dispute fraud charges.

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gcb0
Reason: they can assimilate bit and become the major exchange because they are
already a mane brand.

While with nfc the phone manufacturers have full control and they will be dead
in the water while Apple/Google process all the transactions.

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canistr
David Marcus basically wants the IBM RFID payment solution:

[https://www.youtube.com/watch?v=eob532iEpqk](https://www.youtube.com/watch?v=eob532iEpqk)

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wellboy
Erm, it is forbidden to buy Bitcoins with paypal btw...by paypal

~~~
dingaling
Yes, it's a shame that Mr Marcus didn't discuss how he bought his Bitcoins.

Did he have to play the two-step bank account shuffle like the rest of us?

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btbuildem
Or, you know, BTC transactions via NFC..

~~~
mrb
I thought about this and it would be a great idea. Today's solutions typically
involve scanning a QR code and the Bitcoin wallet sends the transaction over
the Internet. But when you have poor signal, this does not work well.

Instead, a Bitcoin wallet could send the transaction (a few hundred bytes)
over NFC. This gives an extra advantage: the point-of-sale would broadcast the
transaction to hundreds of Bitcoin p2p nodes itself, hence reducing the risk
of accepting a zero-confirmation transaction!

~~~
00rion
If it takes approximately 10 minutes to confirm a transaction, it seems like
you would be putting merchants at risk. Perhaps some sort of bitcoin insurance
would mitigate this risk for a small monthly fee.

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trekky1700
Of course the president of PayPal would prefer a digital method of payments
that he can capitalize on to one that works in physical shops. I use NFC as
often as possible because it is so much faster and more convenient, especially
for small purchases.

~~~
andrewfong
Care to elaborate on how it's faster and more convenient than swiping?

~~~
MAGZine
_tap_ done.

No handing cards, picking up terminals, signing receipts, checking signatures
or any other nonsense.

It's also secure--tapping is chip compliant.

You can also have more than one card on your phone.

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VLM
The goal of NFC seems to be profit off mistakes.

Whoops finger slipped and that went on the corporate card; well, there's a $25
charge to transfer an accidental charge.

Or

Whoops finger slipped and that spouse christmas gift went on the shared
expenses card. Well, if you don't want her to find out early, there's a simple
$25 convenience fee to transfer to a different account.

Or

Whoops paid for the new snowblower in "cash" using direct debit from the
checking account instead of the credit card. Woo hoo thats ten bounced checks
at $50 pure profit, err, I mean, "fee", each!

~~~
swombat
I've been using NFC to make various purchases for some time and have not made
one single mistake. Even if I did, where exactly do these $25 charges come
from? Who charges them?

I've not been charged any extra charges for using NFC.

The goal of NFC seems to be to make it easier to spend small amounts of money.

~~~
sjtgraham
I agree. In the event I did make a mistake I can log on to online banking (or
open the app on my phone) and make a almost instant transfer the money to
another account using faster payments for free.

Even if these fees were assessed, it strikes me as an incredibly inefficient
way to generate revenue.

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dcc1
Uhm f& _k paypal, they regularly screw over sellers and businesses no matter
how long you sell with them using paypal (or on ebay) or how low your
chargeback rate is or how high your rating is.

f_*k em, paypal are driving themselves to irrelevancy

On bright side 2 years ago when paypal screwed me and my company it pushed me
to look at alternatives and i bought a pile of bitcoins when testing how it
works, this turned out to be the best decision ever, thanks paypal for making
me $$$

