"DISH will use Coinbase’s Instant Exchange™ feature to exchange bitcoin payments to U.S. dollars at the moment of the transaction"

Bitcion is probably pretty far off from being stable enough for things to cost "X Bitcions". But out of genuine curiosity, can someone list the benefits of paying with bitcoin besides anonymity/privacy (which for DISH's account-bound customers is irrelevant). I suppose it saves DISH from having currency-specific payment processors in each geographic region if they wanted to reduce admin overhead, but the conversion fees would still exist in a sense from Coinbase's fees.

If dish is hacked and their credit cards on file are stolen, yours will not be one of them.

merchants should not store credit cards in any form.

pretty much every payment processor / gateway allows you to create payment profiles with reference ids which you can store and reuse later to process additional payments.

if DISH got hacked, all the hacker should be able to get are useless payment profile ids.

EDIT: i hope everyone who's downvoting me does extensive pen testing and security audits on their servers/network. storing even properly encrypted card info is a huge liability.

If processor is hacked and their credit cards on file are stolen, yours will not be one of them.

And merchants often store cards despite processor vaults being available; the recent Target hack should make it clear that saying merchants shouldn't store cards is a non-answer.

Former Verifone employee here: While it's technically true that pay-by-reference is a thing most payment processors offer it's not supported by most payment processing software and most processors treat it like a premium service. The vast majority of recurring credit card payments are sadly still done by storing an encrypted card number and decrypting it every time payment is made.

Adding insult to injury, most payment processing software also only conforms to the bare minimum encryption requirement meaning your credit card information is only encrypted using 3DES, keying 3 (meaning a whopping 56 bit key). You can attribute this poor security to laziness since that's the same encryption mechanism PINpads use so the CC co devs already had that code laying around to repurpose.

Of course I have no idea what software Dish uses, who their processor is and what those two things allow/support. Dish may actually be using proper pay-by-reference transactions or they may not, I have no idea.

None of this changes the fact that a payment system where you must reveal your secret key (cc#) in order to spend is inherently flawed, poorly designed and will be frequently compromised at every link in the chain. It's just a bad security design from the ground up.

the Target hack was not a hack of the payment processor. it was malware that effectively MITM'd the swipes and stored them on target's compromised servers. so whether the cards were stored by the merchant or not would have been irrelevant.

> If processor is hacked and their credit cards on file are stolen, yours will not be one of them.

i'll put my money on the merchant being hacked before a payment processor whose business IS data security.

All still problems Bitcoin would have avoided.

A problem with pay by reference is that it locks you into that processor for future recurring payments on that card. If you are selling something in a fairly high risk category, there is a lot to be said for keeping options open.

Consider the case where the hacker gets in and sits on a machine that processes cards for a week. With bitcoin, the only people who would lose money is Dish, the users wouldn't have any direct effect.

If you already have a bunch of bitcoin sitting around for other reasons (you stuck a bunch of savings in it, or are selling drugs for bitcoin, or you do substantial amounts of mining) and you want to pay for stuff with bitcoin anyway, this saves you a step, and time waiting for bank transfers and such.

It also saves DISH from charge backs; Bitcoin is cash.

Just because someone pays with a not-directly-refundable method doesn't mean you don't have to refund them.

Not real refunds, but fraudulent chargebacks where the person who sent you money unilaterally takes it back (via the credit card processor).

It does mean, though, that the customer has to talk to you to get a refund, and it only costs you the refunded amount.

With a chargeback, the notification from the credit card company is often the first you hear about there being a problem, and you pay a chargeback fee ($15-30) in addition to paying the refund. In fact, even if you convince the credit card folks that the charge was legitimate and you are not required to issue a refund, you still have to pay the chargeback fee.

No, but it means you have the choice whether or not to refund them; you have no such choice with credit cards. And charge backs are generally a problem with fraud, not good customers.

Yeah, just like companies using payment processors are not accepting credit cards but instead are accepting a third party who will stand in front of them and accept credit card transfers in exchange for dollars.