Credit card providers charge merchants a cut of the payments they accept, called interchange fees or swipe fees. With two major card providers aiming to elevate rates, could crypto become an alternative?
“Visa Inc. and Mastercard Inc. are planning to raise swipe fees for some types of credit-card purchases in April,” the Wall Street Journal reported on Wednesday, adding:
“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 credit card fees rise, other options will become more attractive to merchants. That includes crypto. Digital assets also incur transaction fees, but some may be cheaper alternatives than the current credit card scene, especially if card fees continue rising.
Bitcoin (BTC), in particular, has faced a great deal of criticism over transaction fees that seem to prohibit it from ever becoming a reasonable means to pay for everyday purchases. Many, however, completely disregard the costs that merchants incur by accepting payment via debit or credit cards. Solutions such as Bitcoin’s Lightning Network also exist, improving transaction fees and speeds for Bitcoin.
