Are Bitcoin Payment Services Similar to Credit Cards?
Bitcoin Vs. Credit Card: The Similarities. Bitcoin, the trendiest cryptocurrency, has been accepted by some as the safe and sound money of the Internet. Using proper carefulness, one can make or receive payments to anyone without illuminating any sensitive information linked to their bitcoin accounts or wallets. cryptocurrencies like Litecoin and Ripple are also seeing a surge in transactions.
Going by the increasing acceptance of bitcoin and other virtual currencies, many businesses have started offering payment-related services that make and accept payments in crypto.
This piece of writing explains how bitcoin payment services work, the compensation, associated costs that users should be conscious of, and whether these services are a threat to the traditional fiat currency based payment systems.
Bitcoin Vs. Credit Card: What is a Bitcoin Payment Service?
In summary, bitcoin payment services, or bitcoin commercial services, enable merchants and businesses to accept payments in bitcoins from individuals for the goods and services being sold or delivered.
It works in the same way to the processing of a standard credit or debit card payment service, with some essentials to bitcoins.
Bitcoin payment services work in a like fashion. They act as an mediator layer between the payer and receiver for processing of the bitcoin payments, which also involves recording the transaction on the blockchain open ledger.
They allow buyers to accept payments in bitcoins both online and at physical locations without the buyer or the seller upsetting about the complex background process of bitcoin payments that gets executed in the background.
Bitcoin Vs. Credit Card:
Advantages of Bitcoin Payment Services
Similar to a standard credit card payment, bitcoin payments claim to be relatively cheaper due to lower transaction costs. A payment service, like BitPay, charges a flat 1% settlement fee to the buyer, compared to 2% to 3% charged by the fiat currency credit card processing overhaul.
Bitcoin payment services permit a borderless payment network, which enables seamless move of bitcoins in any amount from anywhere across the globe, through any mobile or computer, to the buyer’s account in a large number of countries in a currency of merchant’s choice.
Bitcoin payment services retain to maintain transparency in the highly dynamic exchange rates between bitcoin and the fiat currency.
By means of such services, a merchant not only gets various mediums to identify global payments, but he also gets a consistent and authentic identity in the virtual world of cryptocurrencies, which is much safer, transparent, and dependable for getting payments.
BitPay is one of the early and popular contributions available in the U.S. since 2011. Coinbase, a cryptocurrency swap, also offers a merchant app for businesses for bitcoin payment services. CoinGate, SpectroCoin, and CoinsBank are other principal players offering similar services in a variety of flavors to suit the needs of merchants and payers eager to deal with bitcoins.
A decision is available in a variety of fiat currencies by the different operators. For example, BitPay offers direct credit amounts in US dollars (USD), Euros (EUR), Australian dollars (AUD), Pounds sterling (GBP), South African rand (ZAR), and Bitcoin (BTC). It chains direct bank deposits in 38 different countries and bitcoin settlements in 240 countries across the world.
A Threat to Existing Card Processing Services?
Bitcoin and other cryptocurrencies have lately come on the radar of authoritarian agencies and monetary authorities across the world. While lots of nations, like Japan and the U.S., have permitted transactions and allowed cryptocurrency exchanges to function, China has been lessening the screws on their use. (For more, see countries where cryptocurrency is illegal)
Yet, the overall increasing receiving of bitcoins is indicative of more and more global users agreeable to transact in them. The subsistence and continuously increasing influence of a parallel, borderless economy which is out of control of any vital authority is also putting the business of the traditional card and commercial payment service providers at jeopardy.
From a time where all was being dealt in fiat currencies to now, where an increasing portion is switching to cryptocurrency dealings, the related services linked to fiat currencies are bound to feel the heat. Bitcoin Vs. Credit Card
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