Credit Cards and Cryptocurrency

With the aim for the world to invest better, there have been many portfolio changes, the stock markets; financial sector has been rallying against its close competitive ally the cryptocurrency, using the blockchain technology has disrupted all the financial instruments and process that have been running across several enterprises. The peer-to-peer system of operation has efficiently managed to cross all the barriers of transferring ownership of the coin currency without owning any physical assets.


Credit Cards and Cryptocurrency


In recent times, the usage of non-cash modes of payment has increased more than twice in every single minute, the number of ACH transfers amount to more than a trillion. The cost of payments has increased, the transaction fees range between 2-3 % that is again negated by crypto money transactions, hence the competition in the digital payments is high, Ethereum Code is a better option to trade where there is no dependence on the network for payments to go through the gateway terminal. The ACH transfers are sometimes unreliable, increasing the dependency factor.


How Does the Credit Card Work?


  • In a typical credit card transaction, five or more parties are involved, the merchant, consumer, Issuer, Acquirer, and the switch terminal, POS.
  • the consumer purchases goods and services from the merchant and in return swipe their credit card for making the payments, facilitated by the issuer, the POS terminal, and the acquirer.
  • The issuing bank is debited from the consumers’ credit or debit card and the acquiring bank of the merchant process the swipe via Visa or MasterCard to process the transaction and take the credit. the issuer and acquirer tie the transactions
  • the switch acts as the middlemen between all the merchants and acquirers worldwide to let the processing flow seamlessly
  • the transaction fees are charged to process and pay the terminal fees, cost of the service rendered and cover any fraudulent transactions, a small percentage of say a 0.1% goes to the terminal Visa or MasterCard per transaction and the rest to the Merchant

In case of coin currency, there are typically no intermediaries involved, the sample size of a transaction n digital currency Ethereum Code is around 250 bytes and the cost would be $ 4.5. On an average it is expensive than the ACH when the time value of money is considered, however, the coin currency transactions work out cheaper than credit card payments for a value more than $200 to average out, offering easy liquidity and no inflationary pressure from the economy.