Cryptocurrency has gained immense popularity over the years, and many view it as a viable option for payment processing. However, some still prefer traditional payment processors, such as credit cards or PayPal. In this blog post, we will compare cryptocurrency to the traditional methods, focusing on their advantages and disadvantages. Let's delve into it!
Transaction fees
One of the most significant differences between cryptocurrency and traditional payment processors is transaction fees. Traditional payment processors charge a percentage of each transaction as their fees, which can range from 1% to 4%. On the other hand, cryptocurrency transaction fees are relatively low, averaging around $0.50 per transaction.
Transaction speed
Traditional payment processors are generally faster when it comes to transactions when compared to cryptocurrency. Transactions through banks, credit cards, and PayPal can be completed within minutes, while cryptocurrency transactions can take hours or even days to be completed. However, there are exceptions, such as the Ripple platform, which can process transactions in seconds.
Security
Cryptocurrency transactions are at a lower risk of being fraudulent as they are encrypted and secure. Transaction records are stored in a public blockchain, which means that it's extremely difficult to hack or alter them. Traditional payment processors, however, are not as secure as cryptocurrency. Fraudulent activities have caused many people to lose their hard-earned money through credit card fraud, identity theft, and chargebacks.
Accessibility
Traditional payment methods are widely accepted and can be used by anyone with a bank account or credit card. In contrast, cryptocurrency is still not widely accepted in many places. However, the number of merchants accepting cryptocurrencies is growing rapidly.
Volatility
Cryptocurrencies are very volatile and can change in value in a matter of hours. This unpredictability makes it difficult for merchants to accept cryptocurrencies as payment, as the value of their goods and services can change radically in a short period. Traditional payment methods are not subject to this volatility, and merchants can easily determine the value of their goods and services.
Conclusion
Both traditional payment processors and cryptocurrency have their advantages and disadvantages. Cryptocurrency offers lower transaction fees, high security, and better anonymity, while traditional payment processors are faster, more accessible and less volatile. Ultimately, the choice between the two options will depend on your needs, the type of transactions you undertake, and the level of security you require.
References
- Forbes. (2021). "Cryptocurrency vs. Credit Card: Which Is Safer for Online Purchases?" [Online] Available at: https://www.forbes.com/advisor/credit-cards/cryptocurrency-vs-credit-card/[Accessed 15 Mar. 2022]
- Investopedia. (2021). "Cryptocurrency vs. Credit Card Transactions: Pros and Cons." [Online] Available at: https://www.investopedia.com/articles/personal-finance/030615/cryptocurrency-vs-credit-card-pros-and-cons.asp[Accessed 15 Mar. 2022]