High Interchange Fees By MasterCard And Visa May Push Merchants Towards Adopting Bitcoin Payments

According to the Wall Street Journal, Visa and MasterCard are reportedly planning to hike fees they charge merchants that accept debit and credit card as from April.  Although the credit cards payment processors may be looking at furthering their financial assets it may, however, backfire as merchants may opt to move to crypto where processing of payments is a lot cheaper.

The proposed changes include interchange fees that merchants have to pay banks once a customer uses a debit or credit card to purchase goods.  The merchants will have to consider passing the fees to consumers through hiking the price of good and services.  Visa and MasterCard were embroiled in a lawsuit last year and they had to pay $6.2 billion to merchants for violating federal antitrust laws.

Merchants adopting crypto

Most merchants have been sceptical about accepting crypto payments such as Bitcoin because of its volatility and nuances.  However, that is likely to change because of the increase in the amount of fees they pay to debit and credit card processors and they may turn to Bitcoin payments. 

Economist Mark Thornton indicates that if MasterCard and Visa increase their fees that will, of course, play to benefit Bitcoin because most businesses operate on thin margins which will push them towards accepting Bitcoin. This is evident from the fact that most businesses do not accept American Express cards since they charge higher fees that often affects their business margin. Uptake of the idea of Bitcoin payments may be slow but eventually big chains will adopt it in large numbers.

Consumer scepticism of crypto nuances

Crypto nuances such as its lack of regulation and volatility have made Bitcoin payments has made its adoption by consumers difficult. Stabilizing of Bitcoin’s volatility can make it easier to be adopted by many customers as a form of payment. The biggest challenge for Bitcoin is the stability of the dollar which makes it difficult for most Americans to adopt bitcoin as a safe and stable store of value.