There are several places where it is possible to pay using virtual currencies. A wide range of payment processors has been supporting cryptocurrencies in the last years for companies to reach new customers and avoid paying commissions from credit and debit cards. There are other benefits as well that must be taken into account.
Although cryptos lost part of their value during the last few months, they can still be used as a means of payment in many different stores and places. One of the most important things to mark is that crypto payments are much cheaper in terms of fee compared to debit and credit cards.
Banking institutions tend to take fees for ATMs, checking accounts, paper fees, check fees, transfer fees and more. Every single service has a fee associated with it. However, payment gateways such as Bitpay or Coinpayments charge between 0.5 percent and 1 percent per transaction. Additionally, crypto wallets are free to use and crypto fees tend to be minimal if there are no payment processors involved.
Another thing to take into account at the time of analysing why crypto payments are cheaper and more convenient than traditional payments is the fact that financial institutions and retailers ask for a lot of information from customers. Users need to provide name, address, net worth, investments, and more information in order to use different services.
Cryptocurrency transactions are different. It is not necessary to provide all the information that other institutions ask for. If users do not connect bank or credit card accounts to a Bitcoin or altcoin wallet to use these virtual currencies. Transactions between crypto wallets do not require any additional information more than an address and amount of funds that are going to be transacted.
A third thing that is worth mentioning is the fact that cryptocurrencies are a borderless means of exchange that allows for instant and cost-effective transactions around the world. There is no need to wait or pay for fees and no limitations about how much money can be sent or received.
It is always possible to use virtual currencies anywhere around the world in case it is necessary without carrying large sums of cash around and paying for higher fees with credit cards. Additionally, some places might have limits for credit and debit card payments.
Using virtual currencies online is also something very positive. Merchants selling online can start to accept Bitcoin or other altcoins in a very easy way. Payments can be processed immediately just by using a plugin in WordPress or similar sites. Additionally, there is no need for international buyers to pay in their local currency or pay exchange fees for other fiat currency.
Without using virtual currencies it is possible to request a charge back. That means that a vendor sold an item, a client could use it, and give it back and request the payment. Traditional financial institutions allow for these practices because payments are not instant. Instead, using virtual currencies this cannot happen. Once the transaction has been sent, there is no turning back.
Clearly, the vendor can still give back the funds if a product was not okay or it was in a bad condition. That means that customers will not be requesting a chargeback when they’ve received an item that is in perfect conditions and the payment was not yet processed.
This works in a similar way as with cash. Once the buyer gives the funds to the vendor, it can still claim for a refund but fraud is reduced.
Virtual currencies can be used in a much easier way than other payment options available. Although there are several NFC and POS terminals that accept payments with cards, they still have a lot of information about the user and customer. This is why having virtual currencies in the phone is a good replacement that is cheaper and without having to provide all the private information about the person that is using this service.
Furthermore, there is an important industry related to crypto payments. Many companies are entering the space and processing billions of dollars of transactions. This is the case of Bitpay, one of the most successful payment gateways in the market. It works in 200 different countries and it has integrated with BitTorrent. There are 100 million users able to pay using Bitcoin and other virtual currencies.
Finally, there are around 20 million people around the world that own virtual currencies. Many others have heard about them and could enter the market in the future. Square, a recognized credit card payment processor that works with merchants is competing against Paypal and increasing profits made through BTC sales.
There are several countries such as Turkey, Venezuela or South Africa that have several cryptocurrency users that are ready to start using their cryptos to pay for different goods and services. Just a few days ago, a KFC store in Venezuela started accepting virtual currencies as a means of payment. Additionally, in Denmark, there are 1,500 restaurants that accept virtual currencies.
According to some reports, 80 percent of Australians would like to make cryptocurrency payments.
It is currently possible to buy cars, homes, items and many other things using virtual currencies such as Bitcoin and many others.
In the future, virtual currencies could increase in value. There are some experts that believe that a Bitcoin exchange-traded fund (ETF), could be approved by the U.S. Securities and Exchange Commission (SEC) something that could trigger a new bull market, or at least allow new institutions to enter the market.
Furthermore, with the so-called Lightning Network (LN) Bitcoin would be able to perform millions of transactions at almost no cost and instantly. There are several firms that are working with this technology and it might be implemented in the coming years. Bitcoin experienced some scaling issues at the end of the last year when people were trading Bitcoin and using it as never before.
With the Lightning Network, Bitcoin can be used as a means of payment without any problem and it might help companies to receive new customers.