MasterCard Rails Against Bitcoin's (Semi-)Anonymity 111
angry tapir writes: MasterCard has used a submission (PDF) to an Australian Senate inquiry to argue for financial regulators to move against the pseudonymity of digital currencies such as Bitcoin. "Any regulation adopted in Australia should address the anonymity that digital currency provides to each party in a transaction," the company's told the inquiry into digital currencies. MasterCard believes that "all participants in the payments system that provide similar services to consumers should be regulated in the same way to achieve a level playing field for all."
Decentralization, do you speak it? (Score:5, Funny)
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No, you are wrong.
Bitcoin is already mostly decentralized, and Bitcoin 2.0 will be completely decentralized with no outside dependencies at all. Mastercard just wants to maintain their Bankster monopoly.
Sorry about their luck, but it's already been decided that most of us in Cyberspace are not going to allow banks to get control of this currency, and we are not going to comply with any regulations regarding it.
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The non-anonymity of MC transactions is a huge liability. Not only does my MC payment for my coffee allow me to pay for my coffee, but it also allows the merchant to perform future transactions (whether valid or not). It's an authorization not a one-time transaction. This price is just too high and is the source of all CC fraud. There is no reason why any merchant needs to know who I am. If customers choose to disclose their identity to sign up for their email spam, that's their problem, but I should n
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If you didn't authorize that transaction, it's fraud. If Starbucks uses your card info later, they committed fraud. And you, as a cardholder, is 100% "safe" from those charges.
The only reason merchants check ID's on transactions is as a flawed fraud protection measure.
That's a violation of the merchant agreement for all merc
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Because the courts are the best way to reverse transactions. I've had the scenario you describe regarding road tolls and car rentals, and I challenged it with my bank. Got me exactly nowhere. I suppose I could go to court for a $75 fine, but who has time for that?
Legally some jurisdictions may consider it a one-time charge, but technically they have everything they need to perform a second charge, and it's your blood sweat and tears to challenge the fraud. That waiter skimming cards will not be deterr
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And that's not fraud. And certainly not the "major source" of cr
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Coffee shop employees are perfectly capable of skimming credit cards so they can perform illicit transactions also. I've had that happen to me too. The technical ability to so easily skim numbers is what enables fraud. There's no encryption there.
"I never authorized that charge" was not sufficient for my bank. So then it's off to court...
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I've never had any problem with sending a letter by certified mail (some companies seem to ignore any letter from you unless you have legal proof they received it) and challenging a transaction.
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The law, or rental company policy, may differ in your country to mine, but every time I've hired a car (lesseeeee.... 5 countries on 3 continents) I've read the contract before signing it and seen the authorisation for such charges. (OK, in Russia I had to get it translated for me, but that
they must hate cash, too (Score:5, Insightful)
since that's the ultimate anon payment system.
of course, we know what's going on. they hate having to compete against another company.
poor babies!
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Exactly. One of the benefits of a cash is anonymous transactions, one of the rights people reserve unto themselves.
Making everything electronic so government can track it is just another sad cog in the panopticon the government is building, a precursor to a 1984-like dictatorship.
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You're wrong, it's ALREADY 1984.
Both bitcoin's and your job is to bring us OUT OF IT.
That means restoring our natural rights to anonymity.
You know, that stuff that got stolen from us by corps and govs.
Re:they must hate cash, too (Score:4, Insightful)
since that's the ultimate anon payment system.
of course, we know what's going on. they hate having to compete against another company.
poor babies!
They absolutely hate cash... but seeing as the same forces who issue cash also grant them license to operate, they cant do jack shit about it.
But Bitcoin... there's people they can sue.
Seriously, if it were legal for MasterCard to punish businesses who accept cash, they would.
Re:they must hate cash, too (Score:4, Insightful)
Re:they must hate cash, too (Score:5, Interesting)
They require merchants to suck up the cost of accepting Credit cards and not allowing a company to charge more to cover the credit card merchant fees. Of course 'cash discounts' can be done but that's uncommon. Most places just suck up the %3 as part of the cost of business so anyone paying cash does essentially pay more.
First I'll say that this little gem in the T&C is illegal in Australia (and anywhere else with semi-sane consumer protection). Hell, even in the United States I've negotiated better prices with cash because of merchant fees.
But this rule does not discriminate against cash accepting businesses. Everyone who accepts credit cards has to pay, even if they have no cash facilities what so ever.
In fact, it helps businesses that do accept cash because they have a percentage of transactions that are not subject to merchant service fees so they make more profit by giving a slight discount meaning a business has no incentive to refuse cash.
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Depends on the business. Small businesses do see the discount since the amount of cash is small enough that the cost of handling cash is basically nil.
Larger businesses can find the cost of handling cash is larger than the merchant fees - cash handlers get special t
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Sorry, but this is utter bollocks.
I've worked deploying EFT systems both large and small. I can tell you there is a large American petroleum distribution company who's merchant fees utterly dwarf their staff costs. I'm sure they're not the only ones. A large Australian supermarket chain has stopped buying card only automatic checkouts because they aren't being used enough.
Cash and debit are far cheaper than credit.
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I often use credit because it gives me extra protection, beyond what consumer law and the merchant offers. The merchant should view it as the cost of getting business from me, because I wouldn't buy something expensive from them if I had to pay in cash. In fact only accepting cash or debit on high value items screams scam to a lot of people in the UK for this very reason.
For cheap things or small retailers I'll use cash or debit though. No way I'm paying for a car in cash and missing out on that extra prote
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Sorry, but this is utter bollocks.
I've worked deploying EFT systems both large and small. I can tell you there is a large American petroleum distribution company who's merchant fees utterly dwarf their staff costs. I'm sure they're not the only ones. A large Australian supermarket chain has stopped buying card only automatic checkouts because they aren't being used enough.
Cash and debit are far cheaper than credit. The problem is banks have addicted people to credit using rewards programs and charged the merchant to accept cards (which well and truly pays for them and some).
The cost of attendants/clerks/etc (who don't go away when credit is used) is not the only factor. Getting enough denominations for each day (small coins/bills from the bank are only fee-free when you ask for small quantities), reconciling the drawers, counting the cash, cash theft and counterfeit bills, etc all add up quick. Merchant fees and fraud chargebacks are certainly non-negligible but cash is not the silver bullet. That would be using silver (or gold). What could possibly go wrong with having
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People are "addicted" to the idea that some fraction of the increases in productivity show up as increased income. That hasn't been true for a long while. Cheap credit has been used to mask this robbery of the working class, but now the ride is over and the bill is in the mail. And since middle-class buy
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"Help wanted" (Score:2)
cash handlers get special training because they need to know how to reconcile their cash box
"Help wanted. Must be able to add. No English majors, please."
Give me a break...
Re: they must hate cash, too (Score:1)
I'm pretty sure the cash discounts are about taxes. Places that have them usually have them well above the fees.
Large businesses have other ways to avoid taxes, so they don't need to preferentially accept cash.
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They require merchants to suck up the cost of accepting Credit cards and not allowing a company to charge more to cover the credit card merchant fees. Of course 'cash discounts' can be done but that's uncommon.
Not any more [visa.com]:
Beginning January 27, 2013, merchants in the United States and U.S. Territories will be permitted to impose a surcharge on consumers when they use a credit card. Historically Visa has not permitted retailer surcharging, but allowing surcharging was a key provision required by merchants to settle long-standing litigation brought by a class of retailers in 2005.
There are states in which a surcharge for credit card usage is illegal, but these states typically allow for cash discounting.
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My only note here is that a cash transaction requires the physical currency representation to change hands. This means the people must be in the same room with each other, or through some proxy. Either way, you lose a little anonymity there.
Re: they must hate cash, too (Score:1)
I'm pretty sure they hate MasterCard gift cards too.
I agree (Score:5, Insightful)
. "Any regulation adopted in Australia should address the anonymity that digital currency provides to each party in a transaction," the company's told the inquiry into digital currencies. MasterCard believes that "all participants in the payments system that provide similar services to consumers should be regulated in the same way to achieve a level playing field for all."
For the first time in my life I totally agree with the credit card industry!
Mastercard, please immediately start providing anonymous transaction services so we can level this playing field ASAP!
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I'm sure they would like to, but they can't. Have you heard of something called financial regulations?
Can you cite a financial regulation that prohibits anonymous financial transactions? Since cash, bitcoin, and anonymous prepaid debit cards are all legal, I doubt if any such regulation exists.
Re:I agree (Score:5, Informative)
I'm sure they would like to, but they can't. Have you heard of something called financial regulations?
Can you cite a financial regulation that prohibits anonymous financial transactions? Since cash, bitcoin, and anonymous prepaid debit cards are all legal, I doubt if any such regulation exists.
I can, In Australia it is the financial transactions reporting ACT, meant to prevent money laundering and it is imposed on all financial institutions. As I understand it many other countries have similar financial regulations for both money laundering and "terrorism" finance tracking. It kicks in at various amounts.
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I can, In Australia it is the financial transactions reporting ACT
Close! It's the Financial Transaction Reports Act 1988 (C'th) [austlii.edu.au].
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meh, been a while since I had to deal with it, close enough though :-) thanks.
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Re:I agree (Score:4, Insightful)
transaction reporting requires you to be able to identify both parties, not just report a transaction took place.
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You probably have regulations regarding gaming winnings, too. We do here in the USA at the federal level, because gambling houses have often been used to launder money. Take it into the casino, convert it, play a little, convert it back, claim it as gambling winnings, pay the taxes. So any person who converts $5,000 or more (or has a slot win of that amount) will have their identity recorded, and the amount of their winnings for the day.
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Casino's fall under the same laws. The laws aren't specific to banks, they apply to all businesses that deal in money exchanges. even bookies, cash transactions with lawyers, transferring money in and out of country, any transaction that may be deemed as suspicious etc etc. unlike the US though we don't tax casino winnings so from experience the US is actually a lot harsher on controlling casinos.
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Money Laundering Laws... pretty much EVERYWHERE
Mod parent up! In fact, in many jurisdictions payment processors are required by law to monitor for and report "suspicious" payments. Individual staff can be held liable, and go to jail, for not doing it.
And cash is no answer. Large cash withdrawals count as "suspicious".
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I'm sure they would like to, but they can't. Have you heard of something called financial regulations?
What's your point?
Do you think that the credit card industry had nothing to do with how regulated financial transactions are?
Do you seriously believe the biggest competitor they could possibly have... Walmart... just so happens to be hamstrung by those very same regulations and unable to compete?
No no... I'm sure it's all a coincidence and they aren't actually angry at Bitcoin because it found an endrun around the completely unlevel playing field the credit card companies themselves designed. Visa and Maste
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no thanks, I like knowing I have a way to reverse transactions for scumbags that scam, I also like to know their is financial obligations on places like mastercard to reimburse me for fraudulent transactions, all of the protections disappear with bitcoin type anonymity. I have no need of anonymous financial transactions for credit cards.
Re:I agree (Score:4, Interesting)
all of the protections disappear with bitcoin type anonymity
Reversing transactions requires arbitration, which is quite possible with or without anonymity (although, you wouldn't want to provide delivery receipts for physical items if you need to remain anonymous).
Actually, decentralized & pseudonymous systems like OpenBazaar which work with Bitcoin provide trustless (i.e. the notary can't steal your funds, unlike a trusted escrow) arbitration services. This sort of opt-in protection is better than what you get with Mastercard, but considering the technology is immensely more complex than what is used in centralized systems and that it is mostly open source (negligible funding), more time is needed until it matures.
I have no need of anonymous financial transactions for credit cards.
I would agree with this. Most of the problems with credit cards is because they are pull payments. The fraud levels would be immense if it became anonymous.
It's very convenient to not be required to give out personal info to prove you are not a fraud, though. It's also good for security: no "pull payment" info to steal when one of the companies you work with has a data breach. So I think from the consumer's perspective it is better in the case of push payments.
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Bitcoins aren't "fee-less", really. If you don't pay a fee, your transaction sits in limbo for however long, leaving you and your vendor standing around like dopes high-fiving one another over how great and practical Bitcoin is. Then you pay a cut to whomever exchanges your Bitcoins into adult dollars for buying groceries and paying taxes. Fee-less. Hah.
Wait, a level playing field? (Score:5, Insightful)
I don't hear them complaining when it's tilted their way.
18-21% and higher interest rates? Obscene late fees on top the the obscene interest rate?
Yeah, I don't feel sorry for them. Not even a little bit.
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Look up transaction fee. Visa/Mastercard name is not free. They get a cut from each transaction done.
Smaller retailers refuse to swipe a card if it is less than a particular amount. Because that fee eats their margin.
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Look up transaction fee. Visa/Mastercard name is not free. They get a cut from each transaction done.
Not actually true. Fees are established between the banks. Different pairs of institutions have different agreements. Sometimes the merchant's institution and the card holder's institution are one and the same. In that case it makes no sense for the bank to use an outside processor, or to charge itself anything. The merchant bank will however charge the merchant for the convenience of the transaction. The card branding company (MC or Visa) never even sees that transaction, let alone charges a fee for it.
Card brand companies typically get revenue from three sources. Licensing fees charged to banks, processing fees (where they compete with tons of other processors, not just MC, Visa and Amex) and additional financial services mostly to financial institutions. MC and Visa only get a "transaction fee" if they act as the processor for the transaction, and they have plenty of outside competition from other companies and even some governments. If they do process the transaction, their cut is a tiny portion of the total fees charged by the issuer to the acquirer, and is competitively priced, given that many other companies exist that could offer to do it for less if they wanted.
The payment card industry is a lot more competitive and nuanced than most people think.
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Okay, that was a lot of talk about people being raised in shitty situations, which totally happens.
I still say that you don't need a financial education to know that you shouldn't buy something you can't afford, or that you should read the credit card application that you're filling out. A much better argument could be made about extreme emergencies that can hit poor people ("my kid broke his arm, we have no health insurance, no cash on hand, but there was this credit card...").
Awww... (Score:1)
How cute, how cute.
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"Setup" (one word) is a noun. The verb is "set up" (two words).
They're even pronounced differently: This is a sétup. I'm going to set úp the router.
(Doing the grammar Nazi thing since the parent is basically insensible.)
Huh (Score:2)
If both sides agree to accept Bitcoin and both sides are fine with the anonymity, why does MasterCard's care? Oh right, they want the government to step in and make it illegal (tried it, didn't work), put in a bunch of regulations that send Bitcoin out of business (obviously they don't understand what Bitcoin is as that won't work either) or at the very least force people to use MasterCardCoin. (why would anyone?)
The right to privacy (Score:1)
Well the right to privacy is a basic right, yet Mastercard is flipping that on its head and requiring the removal of privacy with this claim.
Does Mastercard hand its data to marketers? Does it hand it to NSA? Does it hand data on European transactions to USA? Does it spy for a foreign power? The transaction data for Germany, is that handed to the UK? Does the UK get Merkels transaction information, and the transaction information on other European politicians, and businessmen?
Why is the right to privacy suc
"Bitcoin's (Semi-)Anonymity" (Score:2)
FTFY. Incidentally, we all remember what "pseudo" means, right? Ersatz? Imitation? Fake?
But according to the ATO, bitcoin is not currency (Score:1)
Standard 3 phases (Score:2)
From Gandhi
1. First they ignore you
2. Then they laugh / try to discredit you
3. Then they get a clue and join you
Digital (Score:3)
Consumers have no recourse if a digital currency loses its value or if the digital currency system fails.
Consumers have no recourse if a national currency fails either.
Also, national currencies are mostly digital nowadays. MasterCard themselves do nothing but digital transactions.
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True, although national currencies are unlikely to fail. Governments will tax their citizens in the local currency, so there is incentive for people to earn the local currency, which means there is incentive to work for the local currency. Only gross incompetence by a government can screw up this natural system. The basis for bitcoin having value however is much more tenuous.
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HA !!!!! "national currencies are unlikely to fail". You never took history in high school? Major national currencies failed in the last 120 years, and the fallout of that HUGE, world maps rewritten for one particular case
they made their bed (Score:1)
I call bullshit. (Score:2)
"the company's told the inquiry into digital currencies. MasterCard believes that "all participants in the payments system that provide similar services to consumers should be regulated in the same way to achieve a level playing field for all."
That would imply bitcoin have have to adopt predatory practices.
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And you do it with a unique MAC address, duly recorded by the ISP that provides service where you slurp your caffeine.
The AC already stated that the MAC address was spoofed. Good luck finding the hardware device that has 0a:0b:0c:0d:0e:0f.
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0a:0b:0c:0d:0e:0f.
0a:0b:0c:0d:0e:0f?
Yes!
That's amazing. I've got the same combination on my luggage.
can be anon with a little hassle (Score:1)
Spoof a MAC, connect to some open wifi, and / or use a privacy oriented VPN from some random country send coins through any of the mixing services or send to one exchange, bounce to another and destroy any taint between addresses. If you want to get more creative convert to an alt coin,or multiple alt coins, bounce those around the globe, reassemble in some location to pay for whatever you want.
New alt coins are being made to do this sort of thing au