So I'm not sure if this will create new bitcoin users. But more vendors always helps.
So if you buy $5 worth of bitcoins, it costs you 61.2% in fees.
If you buy $50 worth of bitcoins, it costs you 9% in fees.
If you buy $100 worth of bitcoins, it costs you 6% in fees.
I'll give you an example. I live in Ukraine.
When my father wanted to buy something via PayPal, he had to:
* get a debit card, which requires going to bank, signing some papers, etc. (Ukrainians often have debit cards for receiving salaries, but those usually have internet payments completely blocked. Ukrainians rarely have credit cards.)
* fill it with USD, again going to bank.
* register on PayPal site
* call bank to unblock internet payments (this requires ~10 minutes)
* try paying
* call bank again, apparently they haven't unblocked it
* try again
* Success!
Now let's compare that with what I did to get bitcoins in btc-e account:
* register on btc-e
* select deposit via interkassa
* go to cash terminal nearby, deposit UAH
* so I got USD on btc-e account and can buy BTC with it
So it actually takes less time than dealing with bank cards/PayPal, and isn't expensive (there is, maybe, 2% fee for deposits).
Where are you getting these figures? I can pay 0.5% in fees or less to purchase bitcoins on MtGox. Other solutions are nowhere near 10%.
Then coinbase takes 1% to transfer money somewhere.
So for $3.99 = $3 deposit fee + 0.039c for 1% coinbase
= $3.04 or equivalent to 76% of the cost
For $29.99 = $3 deposit + 0.2999c for coinbase
= $3.30 which is equivalent to 11% of the cost
Lets say I want to $100 to a friend in Mexico:
* My bank doesn't charge me for deposits. (still $100 USD) * Coinbase charges 1% to convert my USD to BTC (converted 8.947 BTC at 11.05usd per btc) * Sending that to someone else costs almost nothing (8.947 BTC). * The person receiving is not charged anything, unless they want to convert to another currency (e.g. pesos)
In this scenario, there is certainly slippage / costs, but it still beats MoneyGram, WesternUnion, Xoom, etc in terms of cost to send money from country to country.