Bitcoin is a currency, one which has a payment method build in. Euro is a currency, too. It has a payment method build in, too: If you give someone a Euro banknote, you're using it. But that's it in regards to built-in payment methods. The one payment method fiat currencies have built in are completely useless, online.
However, as you have noted, there are credit card companies who allow you to use the Euro (or the Dollar or whatever fiat currency) without using its built-in payment method. Similarly, additional payment methods can be developed for Bitcoin, too.
With fiat currencies, you are obligated to use an intermediary (e.g. a credit card company) if you pay someone who's not physically right in front of you. With Bitcoin, you don't have to. You may still choose to use one.
Such intermediaries have in fact been created and banks are really happy about it.
For merchants, using intermediaries is particularly interesting because it means that they can accept payments in Bitcoin easily by delegating the handling of payments to a payment processor. There already are quite a few of these.
Similarly, Bitcoin credit card companies can be created. However, using one of course reduces privacy because no one will give you a credit it you don't identify yourself. This means you lose your pseudonymity when using such a service.
However, using direct debit doesn't have to come at such cost. A payment provider can accept anonymous deposits to an account. This account can then be charged by webstores.
There really is a lot to be improved about direct debit. Banks used it for years without implementing improvements and I really hope we will see some with Bitcoin payment processors.
For example, I think you should be able to activate merchant's access to your account via direct debit. Currently, if you give someone your name, name of your bank, and your account number, they can get money from you. In most countries, you have a short period to notice an unauthorized withdrawal and can get your money back but if you don't notice it fast enough, you lost that money.
If you'd see a notice that some new merchant wants to retrieve 141 mBTC from your account and have 24 hours to accept that merchant only once or add it to your list of permanently trusted merchants or to decline it instantly (which would happen after those 24 hours, anyways), that'd be much better than it currently is with banks where basically everyone is a trusted merchant, no matter whether you ever even bought something from them.
Furthermore, you probably only use one bank account and give every merchant the same bank information to withdraw money from that account via direct debit. Any one of them can give your bank information to someone who withdraws money from it without your consent and you have no way of finding out which merchant you ever bought something from via direct debit is the culprit. You can't create a lot of different account numbers for the same account. However, if an ID different from the account number was used and you only ever use one ID per merchant, it'd be really easy to find the culprit. You would see in your payment processor's web interface that you gave the ID coinbase.com:Rd3pG82U to that weird shop you found 3 month ago and bought something from. Btw.: The ID Rd3pG82U is only 8 characters long, far shorter than account number + name of the account holder + bank code. In fact, it's shorter than any one of them. If IBAN + BIC it's used, it doesn't exactly look better for banks. But those 8 characters are base 58, enough for 128'063'081'718'016 IDs. Or 17'075 ID for every single of the 7.5 billion people currently alive, at a single payment processor alone. With 2 characters being used for redundancy so typing errors are caught, 38'068'692'544 IDs fit into the remaining 6 characters. And if those run out for a single payment processor, a digit can be added and you got 59 times as many IDs as before. Btw.: The 2 check digits are far better than what IBAN has and BIC doesn't have any.
I see. This might provide some protection from frauds. However, what I was getting to was about eCommerce websites or items bought on the internet. Typically, when I buy items from the internet, it takes anywhere from a few days to a week for the item to come to my door and for me to validate that this is the right item. If such chargebacks are only allowed for a day, even having chargebacks are meaningless. – alpha_989 – 2016-12-30T20:58:42.103
In my humble opinion, somebody has to carry the risk, that one of the two parties in a exchange is fraudualant. This is like a insurance provider, and if you have an insurance, you have to pay a premium. Without this premium, no party will be willing to carry this risk. What you are proposing is to transfer the risk to bank, so banks will now start charging extra amounts for debit cards. Even if the transaction is anonymous, there will be a transaction fee, which will perhaps be reflected in banks starting to charge the payee a certain fee for debit card transactions. – alpha_989 – 2016-12-30T20:59:09.473
So one of the key advantages of bitcoin: transaction-fee-less transactions is negated. – alpha_989 – 2016-12-30T20:59:41.587
Credit cards typically bear this risk, which is one of the reasons they have transaction costs. Further, using credit cards builds up your credit history, which helps when you need loans. If transactions are all anonymous, you will not be able to build a credit history. The credit card company typically bears the work of handling all your transcation records and sending it to the credit agencies. The credit card companies also probably have to pay the credit agencies somewhat, which is reflected in the transaction costs, which are charged by the credit card company when you purchase an item. – alpha_989 – 2016-12-30T20:59:55.197
All these probably means that credit cards and USD/Euros are not going away. While I know that bitcoins are supposed to provide anonymity, are people willing to go through all this amount of pain (having bitcoins and USD/Euro, having multiple credit cards (one for Fiat and one for bitcoins), having multiple debit cards, having escrow services for bitcoins)? – alpha_989 – 2016-12-30T20:59:58.080
1I think you misunderstood what I meant where I used the example of 24 hours. Maybe read it again and tell me to clarify if you still don't understand it. || Of course. All those payment processors listed on the page my second link goes to will take a premium. Except for promotional purposes, maybe. || No one knows how high these fees will be in practice but they probably will be lower than for fiat currency payment processors as there will be more competition because competing is easier. || As I already said: No one will give you a credit if you stay anonymous. – UTF-8 – 2016-12-30T21:11:54.360
1Bitcoin doesn't have to eliminate all fiat currencies to be an improvement. There will be competition between fiat currencies and cryptocurrencies. Competition is good. Most people having credit cards already have several ones. There are statistics on this and you can find them really easily. Most people have accounts at different banks, too. And no one says an BTC escrow service can't be a BTC credit card company at the same time. Maybe competition will cause there to be a service which is both and really good at being both. Then, that's a good thing (and one more advantage over fiat). – UTF-8 – 2016-12-30T21:15:59.753
I would expect that credit cards - if the functionality they offer is valuable - remains useful in a hypothetical Bitcoin-dominated world. Bitcoin is a currency, with certain properties that make it compete with the Euro for example. Bitcoin on itself is a terrible payment system. – Pieter Wuille – 2016-12-30T23:56:03.080
The Euro is a far worse payment system. Right now, I had to physically move over 2 km to the next merchant where I can use the Euro's built-in payment system. What makes you think credit card companies can't simply use Bitcoin? This is where it matters least what currency is used. They could even implement their systems such that the merchant receives money in their currency and you pay in yours. That that's not already the case with at least the few major fiat currencies, even though those companies are very international, is a sign of a oligopolist system; too little competition. – UTF-8 – 2016-12-31T00:23:00.423