Bitcoin Business

Visa’s Upping Some Fees And That’s Good for Bitcoin

Visa has just started planning "the biggest changes in a decade to the rates U.S. merchants pay to accept its cards."
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According to a new document published by Visa, the fintech company that processes many of the world’s digital transactions, it will soon be upping some fees on transactions made through its debit and credit cards.

Some say that this proves the value of Bitcoin and cryptocurrency, for fees with digital asset transactions can be dramatically lower when compared to transactions made through classical fintech systems.

Visa Plans to Shift Transaction Fees

According to a Bloomberg article published Tuesday, Visa has just started planning “the biggest changes in a decade to the rates U.S. merchants pay to accept its cards.”

Per a document sent to banks the outlet obtained, Visa’s interchange rates, which are the fees charged every time a consumer swipes or taps their plastic, will be changing, in both directions:

Based on the most recent review in the U.S., Visa is adjusting its default U.S. interchange rate structure to optimize acceptance and usage and reflect the current value of Visa products.

The following are a few planned changes in fees:

  • Digital and over-the-phone uses of Visa cards will be more expensive: “For a traditional Visa card, the fee on a $100 transaction will climb to $1.99 from $1.90.” This is a rate of 2%.
  • Consumers using premium Visa cards at supermarkets will see the interchange fee drop 33%, which would mean $0.77 from $1.15 for a $50 transaction.

Yes, the changes only amount to pennies for each transaction, meaning consumers may not immediately notice the effects of this business decision, though these pennies can stack up over millions of transactions, and may actually force certain retailers to increase the price of their products or stop accepting certain cards entirely.

Could Bitcoin Be An Answer?

Many have suggested that Bitcoin will be a solution to the high rates that credit card providers charge on payments they process.

Per previous reports from Blockonomi, cryptocurrency research firm DataLight wrote that Bitcoin has the potential to surmount traditional payment networks like Visa, Mastercard, and PayPal — which are coincidentally three companies that decided to drop out of Facebook’s crypto project, Libra, after announcing intentions to back the venture.

DataLight at the time wrote that compared to Visa, Mastercard, and PayPal, which all sport hefty fees, Bitcoin’s average fee is effectively negligible.

With the average fee on a BTC transaction amounting to only 0.0005%, it really is nothing. And the fact that fees are effectively identical, whether the transaction amounts to $1 in value or $5,000,000, makes the cryptocurrency even more tantalizing:

Bitcoin was the first cryptocurrency ever and its code is still imperfect. However, with all of its imperfections, it is still many hundred times faster than the existing wire transfers. Its fees are so small that you can transfer millions of dollars for a dozen cents. This is the reason many financial organizations find it so attractive.

Not to mention, Bitcoin can be used by anyone with access to the internet and a mobile device, which means that cards will become a thing of the past, and that the cryptocurrency cannot be warrantlessly seized by governments like how bank accounts and cards are often frozen.

Will Be a Long Journey

Although the seed of Bitcoin overtaking traditional payment rails has been planted, that seed is a while away from sprouting, so to speak.

Speaking to CNBC in a recent interview at the World Economic Forum event in Davos, Ray Dalio — one of the world’s most prominent investors, who heads Bridgewater Associates — said that he doesn’t see BTC as a reliable form of money due to it not satisfying the two things that make something money: it being a store of value and medium of exchange.

Indeed, Bitcoin is extremely volatile when compared to the dollar, having seen years where it has dropped 80% and years where it has rallied over 1,000%. Not to mention, a maximum of seven or eight transactions per second can be processed by the blockchain.

Not to mention, there is not yet regulation that will allow users to spend cryptocurrency without having to deal with the IRS and other global tax agencies.

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I am a writer who has been following the cryptocurrency space since 2013. My insights and interviews have been featured in leading publications in the industry such as LongHash, NewsBTC, and Decrypt. When I am not writing, I work as a team member of the EXODUS division of HTC, a Taiwanese electronics company. I own a small amount of Bitcoin. Contact

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