With Increasing Visa And Master Card Fees, Bitcoin Adoption Is Closer.


Starting this April purchases using Visa and Mastercard may get costlier (Source: Reuters). Change in fee structure will largely affect merchant banks (like Citigroup, JPMorgan etc) who maintain accounts for U.S. retailers. However, it is up to these merchant banks if they want to absorb it themselves or pass on the fee hike to merchants

Currently, up to 2.5% of the fees are charged to merchants. If the hike is passed on to the merchants, we may probably see an increase in consumer goods to cover the fees.

As some suspect, the reason for this hike might be to cover losses due to a lawsuit brought by merchants accusing credit card companies of violating federal antitrust laws. This settlement cost Visa, Mastercard along with several U.S. banks to pay $6.2 billion.

With Increasing Visa And Mastercard Fees, Bitcoin Adoption Is Closer:

Today most of the sale for merchants happen using a plastic card, especially in the United States. Visa and Mastercard have held a strong position, dominating the market for a decade.

However, trends are changing and each year more and more people are becoming aware of cryptocurrencies. New developments each year in crypto are making adoption faster and easier.

  • Increase in the card cover fees which will go up in April (Source: Reuters) will favor for Bitcoin and other cryptocurrencies. Today not only merchants have to pay 2.5% cover fee for card processing but also have to wait up to 3 business days to get the money processed to their bank accounts. Use of Bitcoin and other cryptocurrencies will allow instant settlement and lower transaction fee.
  • The problem of volatility in crypto is solved. BitPay.com & Coinbase.com both allow businesses to set a process to convert bitcoin to USD instantly. What that means to a business is when you accept a payment of $100 in bitcoin, regardless of the price fluctuation you will receive $100.
  • Lower transaction fee. With recent implementations of the Lightning Network and SegWit, Bitcoin transaction fees are now lower compared to 2015 levels.
    • Binance sending 600 Million$ worth of Bitcoin paying only 7$ as the transaction fee.
    • New evolving cryptocurrencies such as XRP and TRON that have almost zero transaction fees.
  • Can be used for micropayments which otherwise is not possible with Visa and Mastercard.
    • Crypto artist was able to sell his art for $0.000000037 via Bitcoin’s Lightning Network.

“Given the above developments, More merchants may start to accept cryptocurrencies.”

But what is there for users?
Today cryptocurrencies are mostly used for a store of money and if such an option was available, users have to pay a transaction fee. Therefore, if merchants share the benefits by offering a discount to customers who opt to pay in cryptocurrencies, users may use crypto as a payment choice.


  • February 17, 2019