Credit card providers already charge merchants a cut of the payments they accept – it’s called “interchange fee” or “swipe fee.” But with Visa and Mastercard planning to raise those rates, could people turn to crypto?
The Wall Street Journal reported yesterday that “Visa Inc. and Mastercard Inc. are planning to raise swipe fees for some types of credit-card purchases in April.” The article mentioned:
“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 a result of this rise, merchants may find other options increasingly more attractive, and crypto is one of those options. Of course, digital assets also have transaction fees, but in some cases, they may turn out to be lower than the current prices for credit cards, especially as those prices continue to rise.
Bitcoin and Ethereum have both faced criticism over the transaction fees that may stop them from ever becoming a real means of doing some shopping in a supermarket. However, some choose to ignore the costs that merchants incur by accepting payment via credit or debit cards. There also other solutions, such as Bitcoin’s Lightning Network, which improves the fees and speeds used for Bitcoin.
As a result of the pandemic, people have turned more to credit cards and crypto-assets as they are contactless and paperless, they can be used both in-person and online, and crypto also comes with a new benefit – the fact that it is decentralized.