Credit card providers such as Visa and Mastercard are planning to cut payments as interchange fees or swipe fees. While these two major card providers are elevating rates, will cryptocurrencies become an alternative?
The Wall Street Journal reported on Wednesday that,
“Visa Inc. and Mastercard Inc. are planning to raise swipe fees for some types of credit-card purchases in April.”
Furthermore, the report read,
“Though invisible to consumers, they [interchange fees] are glaring to merchants, which often end up paying fees of about 2% of their customers’ credit card purchases. The fees are set by the card networks, such as Visa and Mastercard. Merchants pay them to the banks that issue the cards.”
As credit card fees are rising, merchants will find other options more attractive. One among those options is cryptocurrency. Digital assets also have transaction fees but they may be cheaper alternatives to credit cards, especially if the fees continue to rise.
When it comes to transaction fees, Bitcoin has seen more criticism that prevents the digital asset from becoming a reasonable means to pay for everyday purchases. Solutions such as Bitcoin’s Lightning Network helps in improving its transaction fees and speeds for Bitcoin.
With COVID-19 concerns, economies worldwide have changed their paths, and prevention measures have taken prevalence. Many businesses are reopening with various capacities. As detailed by the Wall Street Journal, credit cards have been dominating over cash use especially for those seeking web-based purchases in COVID-19.
When compared to credit cards, crypto assets are also paperless, can be used online and in-person, and also come with other benefits of decentralization.