The recent government intervention and investigation of Mt. Gox at the end of May created a stir with the digital currency, Bitcoin.

While there is some concern that Government intervention will hurt Bitcoin, some feel that government regulations could actually benefit the decentralized currency.

During a recent discussion with Cameron Winklevoss (investor in BitInstant) at the NEXT conference in New York, Winklevoss felt that regulations would help Bitcoin’s reputation and in fact remove the negative association of criminal activity linked to the currency.

Andrew Chang, a founding partner of Liberty City Investors also believes that as more money is invested into Bitcoin start-ups, more people with legitimate reasons to use the system will be attracted to it. Over time, this will cause Bitcoin’s negative image will go away.

Whether or not these predictions will turn out for the better, Bitcoin’s open-sourced architecture could make it difficult for government regulatory actions to take place (pointed out by Gavin Andresen, leader of the Bitcoin Foundation. Read More: Can Bitcoin Make Peace With Washington?).

Another interesting point that Winklevoss mentioned was Bitcoin can make a large impact in micro-payments, “using Bitcoins to pay small fees online for access to content”. Micro-payments have been a pain for the payments industry as the costs associated with payment processing are too high to facilitate such small transactions.

If Bitcoin could be used for as a cost-effective way to provide micro-payments, it could help Bitcoin become a mainstream form of payment. For example the media could charge per article fees in addition to offering full subscriptions to their publications.

Do you agree with Winklevoss’ predictions? Will government intervention actually hurt Bitcoin? Is there a future here with micro-payments?

Over the past year, Bitcoin has grown from a small community of hackers to the latest and greatest thing to be happening in the venture capitalist industry. The excitement around the anonymous decentralized currency appeared to be unstoppable until last Tuesday.

Last Tuesday, one of five commissioners at the Commodity Future Trading Commission told Reuters “we could regulate [Bitcoin] if we wanted. That is very clear”.  This lead to the Department of Homeland Security taking action to seize and control US funds at Mt. Gox, the largest Bitcoin exchange (see the warrant here). Until the government intervention, Mt. Gox handled 66% of all Bitcoin currency conversion. Not only did this mean a huge struggle for the Bitcoin industry, it created great unease for the venture capitalist community assuming that the risk of an entire industry and investment was being taken out by the government in one blow.

So what does the requisition of Mt. Gox mean for Bitcoin investments going forward?

One argument is that this is just the first strike in a series of intervention as an attempt to prevent money laundering, illegal trade and consumer risk. Another argument is that Mt. Gox did not go through the proper process when registering their business and working within the rules for money transfer and banking.

After a week of government intervention the answer plain and simple is still unknown. All that’s left is our own speculation. I personally think that Bitcoin will continue to thrive as a decentralized currency regardless of government intervention, which unfortunately will be inevitable. What do you think about the US Government taking action? Will the Bitcoin movement continue to thrive? Will Bitcoin survive without anonymity?

Trying to figure out the best way to get your hands on a Bitcoin? Try Jeff Berwick’s Bitcoin ATM, a tiny computer that instantly converts your printed dollars into Bitcoin.

To use the Bitcoin ATM, users first are prompted to scan a QR code on their mobile device or enter a user-specific code, telling the ATM where to send the Bitcoin. Users then insert their printed dollars, and viola, Bitcoin! The ATM sends the dollar amount of Bitcoin into the users’ account.

What is a Bitcoin?

Bitcoin is software based, decentralized currency that allows for transactions using peer-to-peer connections. (Read more: Bitcoin, a currency or a commodity?)

Why use a Bitcoin ATM?

Well, transferring money between traditional currencies into Bitcoin isn’t actually that easy. If someone wanted to purchase a Bitcoin they would have to open an account with an exchange where registration could take up to 30 days.  Also, banks are able to shut down accounts that Bitcoin users and exchangers are using to convert money into Bitcoin. With a Bitcoin ATM, the physical ATM cuts out the banks as a middleman. Overall, this machine takes care of the banks and makes it easier for people to change money into Bitcoin.

Jeff Berwick’s Bitcoin ATM is said to launch in Cyprus however there are others in the works.

If an ATM were available near you, would you be using a Bitcoin ATM to convert your money into Bitcoin?

For More:

Read Mashable’s post on a new Bitcoin ATM

Read Jeff Berwick’s interview with Vice

Read Jeff Berwick’s blog at http://www.DollarVigilante.com

When it comes to increasing an organization’s bottom line, choosing the right payment processor can be one of the most important decisions to make. Thanks to the immense amount of information online, transparent payment companies, and the good folks here at Kubera Payments, we’ve got you covered.

Here’s a few pointers to consider before you make your next payment processing decision:

1. Integration

The first thing that you’ll want to ask when choosing a payment processor is: what does my business need? Since the payments industry is complex by nature for both the merchant and their customer it’s a good idea to ask an expert. Make sure that your relationship manager understands exactly what kind of business you operate and what your specific business needs are.

2. Transparency

Make sure that your relationship manager is being transparent. Read and understand the terms of your contract in full. There’s nothing worse than signing up for something you weren’t expecting to get.

3. Understand the fees

Pricing can greatly affect the profitability of a business. Make sure you understand what rates are standard for your country and what the breakdown of fees actually are before you choose your processor. We find that getting a pricing analysis done is the best way to understand exactly what you are going to get and how much payment processing will actually cost.

4. Customer service

Customer service is something that is often over looked. What are you going to do if a problem occurs and you can’t get a hold of customer support? Support is everything. It’s always best to have a great relationship with your processor so that you won’t have to run into problems in the future. At Kubera we pride ourselves with the level of customer service we regularly provide for our clients. For example, we do not believe in phone trees. When you call Kubera you are talking to real people who understand your business.

5. Do your research

Ask around for referrals, search for complaints, reviews and recommendations. Remember that you are making a long term commitment with your processor. Picture booking a flight for your next vacation. Would you go somewhere you never heard of without reading reviews about the place or getting a basic understanding of where you are going? No.

We hope that these tips are helpful when choosing the right payment processor for your business. If you have any more questions about payment processing, credit card acceptance and merchant accounts, feel free to give us a call, we’re always happy to give friendly advice.

BitCoin is a decentralized digital currency that can be exchanged for goods and services in lieu of traditional payment options like credit cards, bank-to-bank transfers and cash.

BitCoin is based on unique cryptographically signed blocks called BitCoins that can be traded between parties like currency.  By taking advantage of public/private key cryptography, BitCoin transactions have been designed to provide both secure and anonymous online transactions. The currency has no central authority and can be exchanged peer to peer or through intermediary agencies. In the words of Matthew O’Brien, associate editor of business and economics at The Atlantic, BitCoins are “anonymous digital gold.”

BitCoins are created through “mining” – using computers to solve complex mathematic equations. It can take years with a normal computer to create a single BitCoin using this method.  In addition to the difficulties surrounding creating BitCoins, the BitCoin system is expected to reach its limit of 21 Million Bitcoins by 2040.  Since the available quantity of BitCoins is fixed, BitCoin has no central bank to issue additional currency and the network for exchanging BitCoins is growing there is substantial inflationary pressure on the currency, creating price instability.

Matthew O’Brien from the Atlantic argues that rather than being a currency, BitCoin is in fact the ultimate dotcom stock. In May 2011, one BitCoin was worth $7.50. In the past few weeks, prices have skyrocketed from $65 to $266, then collapsed and rebounded until trading halted. (see below)

Because of its volatility and the lack a central bank, O’Brien also argues that BitCoins are a commodity rather than a currency, as he believes that a currency needs a relatively stable value to function as a medium of exchange.

The structural deficits within the BitCoin system are primarily a result of its intended nature as a currency.  By prioritizing anonymity, political independence and predictable behavior many of the traditional control structures that maintain a currency (such as a central bank) were not possible.  BitCoin behavior is entirely managed by the code that underlies the system.

While it’s debatable if BitCoin would benefit from a central bank, by eliminating many of the structural institutions included within traditional currencies BitCoin has created advantages that are not available from any other online payment medium: low transaction cost, low barriers to entry and most importantly, anonymity.

Timothy B. Lee of Forbes argues that these advantages are significant enough for people to see BitCoin’s volatility as a manageable risk, especially in those areas that are underserved or restricted by traditional payment methods.  BitCoins have found a home in and will likely continue to serve as currency for a range of niche markets including online gambling, international transactions and the sale of illegal goods.

How BitCoin is going to be used in the future and what will happen with its value is unknown.  BitCoin has the hallmarks of a potentially disruptive technology. As an increasing number of use cases develop, it becomes more probable that BitCoins will find an indispensible use case that enters the public consciousness and catapults the platform into the mainstream.  Until then, BitCoin is certainly worth keeping our eyes on.

Where do you think BitCoin is headed? What does the future hold for this decentralized from of currency?

For those who are unfamiliar with the term NFC (Near Field Communication) is a standards-based wireless communication technology that allows data to be transferred between devices from only a few centimeters apart (ie. mobile phone to terminal).

NFC is the next step from in migrating contactless payments with our credit cards to our mobile devices.

But how close are we to actually adopting NFC and mobile wallets into our daily lives?

If you’ve had a chance to read the Federal Reserve Bank of Boston’s report on Mobile Phone Technology ‘Smarter Than We Thought’ then you’ll have a pretty good idea. If you haven’t, and you’re the type who want’s more than the bottom line you can download it here.

The report outlines both NFC technology and contactless payment’s strengths and weaknesses.

Contrary to what one might think, security is one of NFC’s biggest strengths. Comparing your phone to a wallet, “‘it’s this safe place that can put all of this payments information for, convenience and efficiency, for the consumer to then choose from to make a payment, just like they choose from their wallet”.

The same thing would happen if you were to lose your wallet. If you were to lose your phone, credit cards are encrypted making it even more difficult for a thief to make payments and steal your personal information.

The biggest disadvantage according to the report is the cost of implementing NFC from the merchant’s perspective and the manufacturers. As a merchant if you already own your own terminal, then the cost of purchasing a new terminal with NFC may be a big investment. If you are renting or leasing with one of our solutions, then it can be easily upgraded at a mere $5.00 more per month.

From a manufacturer’s perspective, mobile carriers need to get enough traction both on the consumer and business side and work with all of the stakeholders (ie. app developers & banks) for it to make sense.

We envision adoption happening in the next 5 years however it truly has be a slower process than we had hoped for. Thankfully, Google has stepped up to offering their Google Wallet Card in the near future which should help bridge the gap between getting rid of plastic all together and driving the demand for NFC.

What are your thoughts on NFC and contactless? Are you ready to use it at your business?

Not only have mobile payments become one of the fastest-growing game-changers in the consumer market, we strongly believe that with enough time mobile will be the future in the payments industry.

The two largest and most successful forms of mobile payments to date are Apple’s Mobile-Pay, and of course, the Google Wallet.

The harsh reality is, mobile payments/wallet’s have taken a slow adoption. Due to the lack of infrastructure it probably wont be for a few years before we can get rid of plastic all together.

This is why Google has introduced the Google Wallet Card. It may seem a bit regressive, but someone holding the Google Wallet Card could use it as a hybrid to eliminate carrying multiple cards (both credit and debit) in their wallet and use their phone where possible.

How it works:

Users can add credit and debit cards to their Google Wallet App and use any of these to make purchases with the actual Google Wallet Card. Using the app they will be able to select which card they wish to use and switch between cards at their convenience.

Other Features:

The card can be ordered through the Google Wallet App and sent to your address.

In the event that you lose the Google Wallet Card, all you have to do is cancel the card you lost in the Google Wallet App. There is no need to cancel every card you own.

There are rumors of a “Wallet Balance” feature, transit feature, and user to user money transfer.

What do you think the next steps will be with mobile payments?

Via Android Police

It is standard procedure for an underwriting bank to ask for a personal guarantee. For many business owners it can seem like a stressful or risky commitment. When businesses apply for credit card processing they are often surprised by the amount of information required and and that it takes time for approval.

So Why does it take so much time and paperwork?

Businesses often aren’t aware that accepting credit cards requires an extension of credit to the business. Here is why:

When a customer purchases an item with a credit card they have up to 180 days to report a transaction as fraudulent. This is called a chargeback. Chargebacks help to protect consumers against stolen credit card information, as well as against unscrupulous businesses overcharging their customers.

One classic example of a chargeback is a customer who checks out of a hotel, only to find a bill including pay-per-view and minibar charges that they didn’t incur. After discussing the issue with the proprietor, the customer maintains that they didn’t order 40 pay-per-view movies in one night. Despite this, the hotel charges the credit card holder the full amount. The customer then has the option to call their card-issuing bank and issue a chargeback on the grounds that they didn’t receive what they paid for.

Kubera payments, and our banking partners, provide 24hr daily deposits into the bank accounts of the businesses we work with. As the chargeback from the above scenario could come months after the event, the money from the original transaction will have long since been deposited, and possibly spent. Credit is extended to businesses that accept credit cards to cover this 180 day chargeback risk.

Established businesses with solid financials in low-risk industries normally have little trouble establishing credit card processing. New businesses, especially those in mid-risk industries, often don’t have the processing history and established financials to qualify for credit on their own merit and will require a personal guarantee.

Requiring a personal guarantee is not passing judgement over a particular business or business model. It is designed to allow new businesses, or businesses without solid financial history, the ability to process credit card payments with the backing of the principles for the business.

Further questions about chargebacks or the personal guarantee? Leave a comment or call to speak with an expert at Kubera.

Are you worried about the efficiency of your processing hardware?

Europay, VISA and MasterCard (EMV) have created security incentives to make Chip & PIN standard across Canada. This incentive adds another layer of security to protecting your cardholders/merchants information.

What is EMV?

EMV standards define the requirements that must be met by both Chip Cards and Chip-reading terminals. These standards ensure that cardholders benefit from this security innovation.

Not only does having a terminal that is up to EMV Chip & PIN standards enhance security and protection from fraud, both merchants & customers can expect greater transaction speed & convenience as transactions are made.

Contact an expert at Kubera Payments Corporation to learn how we can benefit your organization and help overcome its processing issues.

Canadians are early adopters of new technology. There’s no question about this. Many of us find ourselves driving two hours across the border to purchase the latest Ipad.  We are also one of the heaviest user’s of the Internet, online banking and shopping. If we rely so much on technology then why are mobile payments so absent in Canada?

Photo Source: phonedog.com

The Task Force for the Payment’s System Review fulfilled their commitment made in 2010 and reviewed the Canadian Payment’s System. The team conducted an analysis and considered the following:

• the safety, soundness and efficiency
• the level of innovation
• the competitive landscape
• business & consumer ease with providers
• payments system oversight mechanisms

So how far behind is the Canadian Payments System?

• 27 EU countries are expecting to save 1.98% of GDP equivalent to 243 Billion Euro’s per year in increased productivity
• Moving from paper-based invoicing to electronic & automated methods allow organizations to reduce the cost of invoicing by 60-80%
• On average businesses realize a 1-2% of revenue reduction by switching to e-invoicing

Canada relies heavily on paper transactions. About one billion cheques are written annually in Canada.  About 60% are issued by large corporations, SME’s and the government.  The remainder are issued by consumers.  These numbers are outstanding as many european countries have either stopped or mitigated the use of cheques all together.

At this point, Canada does not have a practical alternative payments system that has been priced and promoted that seems attractive and makes sense. Our system is outdated and has not evolved to meet the growing needs and wants of its users.

Thankfully the recommendations by the Task Force for the Canadian Payments System should shed some light on the Canadian government and convince them to seriously pursue a new and improved payments infrastructure.

Follow this link to learn more about the initiatives of the Task Force for the Canadian Payments System and how our Payments System can be changed to satisfy the needs and wants of consumers & businesses in a technological economy.