Purchases using your regular debit or credit card could get more pricier if plans by VISA and MasterCard to increase transaction fees are implemented. The affected fees will be levied on U.S. merchants for processing transactions starting April this year. This is according to from the and .
A VISA spokesperson confirmed that fees will indeed go up in April, but only for merchant banks. The latter are financial institutions such as JP Morgan, Citigroup and Bank of America that maintain accounts for sellers such as Amazon and other large retailers.
Merchants Could Pass the Cost to Their Customers
According to the Wall Street Journal, up to 2.5% of the value of goods and services is used to cover transaction fees. This in turn means that if the hike is implemented, the merchants might decide to pass over the new costs to consumers.
A Plus for BTC and Cryptocurrencies
As mentioned, 2.5% of the prices of goods and services is used to cover transaction fees through VISA and Mastercard. This means for every $100 spent for any purchase, $2.5 goes to paying transaction fees. This amount will go up in April if VISA and Mastercard decide to implement the proposed changes.
One is tempted to exclude when comparing transaction costs but when we consider the recent implementations of the Lightning Network and SegWit, we embrace that the network has become less costly when transacting. One researcher on the network at around $0.02 via the following tweet.
Tipping Possible
Twitter users can now tip each other using thanks to the Lightning network. Micropayments were unheard of on the network. Such payments were reserved to coins such as XRP and TRX that have almost zero transaction fees. In the case of , all transactions on its are free.
Another example of the efficiencies of the lightning network can be seen when a crypto artist to sell his art piece for $0.000000037. Such a ‘tiny’ transaction cannot be processed using VISA, Mastercard or even regular hard cash.
Summing it up, with VISA and Mastercard scheduling to increase transaction fees on their networks, , LTC, XRP, TRX, NANO and more might become the choice currencies for merchants when receiving payments from clients. The low transaction fees exhibited on these networks might even result in particular discounts for opting to pay in crypto. This will provide a major boost to crypto around the world.
What are your thoughts on VISA and MasterCard increasing their transaction fees this April? Is this an opportunity for and other to become acceptable forms of payment for goods and services due to low transaction costs? Please let us know in the comment section below.
[Feature image courtesy of Unsplash.com]
Disclaimer: This article is not meant to give financial advice. Any additional opinion herein is purely the author’s and does not represent the opinion of World News or any of its other writers. Please carry out your own research before investing in any of the numerous available. Thank you.
Published at Sat, 16 Feb 2019 16:04:38 +0000
