Merchants turning to cryptos as alternative to rising fees from credit cards


One of the major put-offs for merchants when it comes to providing payment services is in transaction fees. Some merchants absorb such fees (known also as swipe or interchange fees) while others push it to their customers.

Looking for cheaper options

Credit card companies like Visa and Mastercard have been providing payment services for the longest time and there are no signs of this slowing down in the near future. Because of this, merchants are somewhat at the mercy of these companies should they increase their fees. On the international markets, however, news that Visa Inc. and Mastercard Inc. are planning to increase the fees in Q2, 2021 have many looking for alternatives and cryptocurrencies could well be the answer. If that is what Visa and Mastercard are doing in the other countries, this could well be the case in Malaysia in the near future as well. Hence, it makes better sense for merchants to start considering new and other options.

A natural and logical move

The common bracket of swipe fees is about 2%. Merchants would have to pay the banks that issue the cards when customers use them to pay for products and services. If the increase of merchant fees is materialized, merchants would have no choice but to find different ways to reduce their costs. Bitcoin (BTC) or other popular cryptocurrencies could well be a viable option because of several reasons.

  • Lower transaction fees – While trading with BTC does incur charges, it is still lower than standard credit card fees. Having lower fees means being able to reduce their cost of selling the products or services for merchants.
  • Digital platform – BTC or ETH operates on digital platforms and it is in these types of exchanges that customers have become more receptive especially during the COVID-19 pandemic.
  • Paperless and traceable –  Trading in BTC allows merchants to go paperless while they have traceability functions since it is decentralized. This means cryptos are secure and reliable too.
    • Acceptability – More and more countries today have started recognizing cryptos for legal trade. This trend is expected to grow and that should be motivation enough for merchants to start accepting them.

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