But it doesn't matter because merchants aren't allowed to offer discounts for cash or other payment methods, when they accept credit cards. So there's still a 2% - 5% additional fee when purchasing something with e-gold.
Actually, that's not strictly true. Even though brick and mortar merchants may find it a practical impossibility on-line merchants can indeed price discriminate based on payment instrument in an analogous fashion to how they discriminate whether the transactions are handled face-to-face or on-line. For example, look at what some of the largest have done to avoid paying state sales taxes. They have established holding companies which control both the brick and mortar and on-line outlets. Any on-line retailer can do the same: establish a holding company which operates several on-line business (e.g., XYZ.com and XYZ-CC.com), each a separate legal corporation. XYZ-CC.com becomes a CC accepting merchant, XYZ.com does not. Although it slightly complicates the consumer buying experience there is no reason why one site can't offer a link to the other site. All quite legal and likely to pass CC association rules.
> > Generally, all you have to do to put $100 in an e-gold account is buy a > money order for $105 and send it to an exchange provider. If you don't > like spending the extra $5, try bringing a sandwich for lunch one day > instead of going out to a restaurant. That'll put you about $2 ahead.
$105 for the $100 money order will yield what? About $95 of e-gold? It's not a bargain.
It all depends on how and where that $105 was earned. The trouble with all the DGC and DBC payment systems thus far is they are attempting to compete head-to-head with mainstream payment instruments where they are strongest, in the mistaken notion that in order to become viable they must service mainstream consumer needs. This is folly.
When looking at these now mainstream instruments one should consider their history. Originally credit cards were only for the wealthy and the business elite. Travelers Checks, pioneered by Wells Fargo in the late 19th century, were targeted at eliminating the use of cumbersome letters introduction and credit then common for wealthy travelers. Both are now mainstream but only after many decades of restricted marketing and use.
DBC and DGC need to look for customers who have the desire and means to use their instruments. This means not focusing on the millicent ghetto or mainstream payments. Most/all DGCs (and to a lesser degree DBCs) operate under (or at least advertise that they adhere to) Know Your Customer policies. This, IMHO, is the greatest impediment to their wider acceptance. These new instruments need to find ways to adequately establish both their trustworthiness and their agnosticism toward parties using their service.
E-gold's strengths are that it is irrevocable and international. It has a chance for people who require payments with those attributes.
E-gold's weakness is that it attempts to adhere to KYC rules. DGCs and DBCs should no more care about who uses their service then a country's treasury cares about who uses their currency. (other parts of the same government may, of course, care).
steve
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