Adjusting for a 1% cash back that's only 2% surcharge for the ability to dispute charges, pay at the end of the month. VS: Risking a Bitcoin wallet will zero recourse if something goes wrong and an unstable currency.

The way I see it Bitcoins are not stable / safe enough for large transactions and the transaction fees on small transactions are effectively meaningless.

If I have a problem with an online purchase that I can't sort out with the merchant, my bank is more than happy to compensate me for it.

Not possible with Bitcoin.

A lot of places that accept Bitcoins use BitPay and get paid in US dollars. BitPay charge a 3% fee for this service. (You can accept Bitcoins and exchange them yourself but then you take on the exchange-rate risk, which is quite substantial given how much the Bitcoin exchange rate varies.)

you're assuming that merchants won't just keep the 1% difference.

> if it increases the cost of their goods/services in a meaningful way.

You do realise that credit cards aren't some new invention ?

The merchant costs have been factored into people's purchases for decades and there is no evidence it has caused any impact on sales. If anything the huge array of reward programs and partnerships e.g. with airlines has reinvigorated the huge of credit cards.

I just don't see anyone migrating away from credit/debit cards apart from fringe elements of society. Seems like proponents of Bitcoin live in their own world sometimes and treat the existing financial system as some competitor.