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I've seen sites that make use of google checkout or other forms of cards processing to convert USD from debit/credit cards to BTC. I know that these types of sites cannot be opened up to the public because it takes one bad egg to bring the whole thing to a stop.

But what is keeping someone doing this on a small scale to only trusted individuals, friends, family, ect?
Also if one person can do that, btw such sites do already exist, then why don't we(the community) write an open source version and all run such micro-sites for our friends and families?

Most people I talk to get interested until they realize how hard it is to actually buy coins.

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If you operate below the radar that practice can thrive. For instance, if you were to accept a friend's credit card swipe using your Square dongle for the sale of your bitcoins, you'ld probably be in violation of the merchant agreement.

If the charges are from friends and family and only made occasionally Square will probably never know nor care what the reason was for the purchases. But start doing regular "card not present" tranasactions for larger transaction amounts (e.g., $100 or more) and that's probably when you'll end up getting asked for more details on your business activity.

Do know that you expose yourself to the risk of a chargeback should a payment dispute occur.

  • "you'll end up getting asked for more details on your business activity" - I'm new to bitcoin and wondering why that is a problem. Why can your business activity not be selling bitcoins? Is it illegal in some countries? Or is it that merchant service providers don't like it? – JW. Mar 16 '12 at 18:07
  • The merchant agreements generally prohibit charges where the purchase is for digital currency. The merchant processors probably have the policies in place to help lessen the amount of fraud they have to deal with but an underlying principle is that in most jurisdictions it also is illegal to supply credit (to consumers) for the purposes of investment. For example, no stock broker will let you buy stocks and pay using your credit card. – Stephen Gornick Mar 17 '12 at 21:54
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If two people that know each other want to exchange Bitcoins<->normal currencies, they can just give the money to each other in person (provide they live close), use wire transfers (which are a pretty acceptable form of transferring money in some countries), or use Pay Pal (not specifying what the transfer is for).

You don't need much more infrastructure than that if you can trust the other person.

  • The card is the preferred transfer method these days, not wire transfer. It'd be like writing a "for Dummies" guide to exchanging coins. – user887 Jan 7 '12 at 21:10
  • @user887 You are generalizing the situation in US to the whole world. Where I come from, people generally use wire transfers, but that's besides the point. But as I said, if you trust the other party, you can still use PayPal, as you can hook it up to your credit card (or even do a PayPal transfer with just the credit card, without setting up your own account). – ThePiachu Jan 7 '12 at 21:36

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