Are People Paying With Crypto Really Trying To Leave It To The Man? – PYMNTS.com | Omd Cialis

Paying in crypto aims to lower the fees people pay when they buy things by cutting out middlemen like banks, credit card companies, and other payment processors.

Along with privacy, that was the purpose of Bitcoin, which its pseudonymous creator Satoshi Nakamoto describes as a “purely peer-to-peer version of electronic cash” that enables payments “without going through financial institutions.”

See More: Who Is Bitcoin Creator “Satoshi Nakamoto” and Why Does He Still Matter?

But that leaves a very fundamental question: Who benefits most from crypto payments?

There is a strong argument that it is the merchant who accepts it much more than the crypto owner who buys with it. No debit card and credit card processing fees, no additional costs when using reward cards, no attempt to convince consumers to switch to debit instead of credit, no attempt to trick customers into accepting surcharges – anything crypto Payments have when accepted directly is the blockchain transaction fee. What is paid by the sender and not the recipient of a cryptocurrency transaction.

See here: The data point: 44% of consumers say they would change merchants because of card surcharges

Even when running through a crypto-only payment processor that takes the digital assets from the consumer and pays the merchant in fiat currency, the cost of accepting cryptocurrency is generally lower and comes without the need to incur the volatility associated with usage – and security risks your own digital wallet.

Also Read: Crypto Basics Series: What Is a Crypto Wallet and How to Avoid Losing a Quarter Billion Dollars?

Then there are chargebacks. Or rather the lack of them. Cryptocurrency payments are by their very nature irreversible. The only way to get a crypto payment back is for the recipient to initiate a second transaction. With crypto payments, customers can request refunds but not chargebacks — an argument merchants considering crypto adoption are usually keen on.

That is, today’s card system heavily subsidizes the cardholder at the expense of the merchants. And in many ways, accepting crypto at checkout can reduce or eliminate these subsidies by relying on legislation like that introduced by Senators Dick Durbin (D-Illinois) and Roger Marshall (R-Kansas) on July 28th bipartisan law that would give merchants the ability to process Visa and Mastercard across different networks.

Read more: Sen. Durbin wants another bite on card exchange fees

The hard core

While the falling price of cryptocurrencies — bitcoin is down 65% to 70% since its all-time high in November — has likely reduced crypto owners’ willingness to spend something for $22,000 when they bought it for $44,000.

But people are still keen on issuing a growing number of cryptocurrencies, including ether, stablecoins like USDC and even Dogecoin, Stephen Pair, president of crypto payments technology company BitPay, told PYMNTS’ Karen Webster in May.

Also Read: More Consumers Are Buying Crypto and Want More Ways to Spend It

However, it is worth looking at who the crypto donor is.

PYMNTS’ April study, “The US Crypto Consumer: Cryptocurrency Use In Online and In-Store Purchases,” found that 23% of Americans have owned or had crypto in the previous 12 months — nearly 60 million, up from about 41.5 million in the year before.

See also: PYMNTS Data Show Jump in Crypto Ownership, Willingness to Spend It

More than a quarter of high-income consumers said they were “very” or “extremely” likely to switch merchants in favor of one that accepts cryptocurrencies.

An increasingly common way to spend crypto is through Visa or Mastercard-branded crypto debit cards, many of which are issued through exchanges and connected to customers’ digital wallets, allowing users to spend crypto at the point of sale without the merchant even knowing about it All they see is a debit card that they use to pay cash.

What is becoming very clear is that crypto donors are the hardcore crypto users — the people who see bitcoin and other digital assets not as investments but as the future of payments — the next generation of currencies.

That makes the crypto target customer someone just as focused on the ideology of crypto — the back half of the first line in Nakamoto’s bitcoin white paper on peer-to-peer electronic payments, which states, “without through a.” to go to a financial institution”.

And for this privilege of breaking away from financial institutions, they are willing to give up many of the benefits that cards offer them today.

For all PYMNTS Crypto coverage, subscribe to the daily newspaper Crypto Newsletter.

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NEW PYMNTS SURVEY FIND 3 OF 4 CONSUMERS WITH STRONG DEMAND FOR SUPER APPS

Around: The results of PYMNTS’ new study, The Super App Shift: How Consumers Want To Save, Shop And Spend In The Connected Economy, a collaboration with PayPal, analyzed the responses of 9,904 consumers in Australia, Germany, the UK and the US and showed a strong demand for a single multifunctional super app instead of using dozens of individual apps.

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