Bitcoin For Cryptocurrency Payments Is Poised To Take On Credit Cards As Viable Substitute
A recent post published by Forbes’ contributor, Panos Mourdoukoutas shared that cryptocurrency giant, Bitcoin has the potential to completely replace credit cards. Some of the main arguments made include that of Bitcoin’s ability to disrupt industries, especially that of the retail industry, while offering speedier, cheaper and instant transaction processes. Here are the main points that require highlighting.
Bitcoin Is Advantageous For Merchants?
Author, Ian DeMartino of the book, “The Bitcoin Guidebook: How to Obtain, Invest, And Spend the World’s First Decentralized Cryptocurrency,” was quoted by Forbes.
In particular, he was quoted saying,
“From a merchant perspective, Bitcoin has the advantage of not having large fees from credit card companies that cut into profits.”
In other words, credit card fees are expenses incurred by the sellers, and if they don’t meet their profit margins, it could be a burden for them. CEO of CRYPTO.com, Kris Marszalek, sides with DeMartino’s perspective, adding that cryptocurrencies are surely to disrupt the “banking and payment sector.” His outlook on credit cards seems quite negative, as he believes the tactic used pressures consumers through its “late fees, penalties, and high interest rates.”
“Blockchain Backed Credit Is Fairer”
If not traditional payment service providers, then what? According to Marszalek, blockchain-based services are ideal because they are “fairer and more affordable” than that of credit cards. Co-Owner and CVO of Job.com, Arran Stewart has provided a clear image as to how Bitcoin can replace credit cards.
According to him, it does not require much more that a “simple wallet verification” that would support even the smallest validation, such as a “fingerprint”. He compares this to Apple Pay, but trusts that privacy, speed and security would be met with a blockchain-based solution. Unfortunately, for cryptocurrencies to reach that height, transaction volume needs to go up, which, for the time being, can only be achieved when new money comes in (i.e. institutional investors).
Will Consumers Give Up Credit Cards?
Credit cards have been around for several decades now, therefore transitioning to a blockchain solution will not be as simple as one might perceive. With credit cards, consumers have time to pay off their debt and can do so one minimum payment at a time, which will rarely be the case with blockchain-based solutions.
As per another author, Jonah Lehrer,
“Paying with plastic fundamentally changes the way we spend money […] credit cards make the transaction abstract, so that you don’t really feel the downside of spending money.”
After being presented with some arguments, do you think Bitcoin can replace credit cards? Let us know why you believe so in the comments below!