Bitcoin is a digital currency that facilitates seamless online money transfers. Here’s what you should know about Bitcoin and online payments.
For centuries, cash has been the basis of financial transactions and still plays a crucial role in the global economy. However, many studies reveal cash has been declining for many years now. According to one UK study, cash transactions have declined by almost thirty-five percent since the beginning of the COVID pandemic.
Meanwhile, wire transfers have also been around for a very long time, with credit cards accounting for most online transactions. The idea that they could pay for things instantly and promise to repay a third-party institution within one month instead of right away quickly attracted many people.
However, payment systems and consumer needs have evolved over the years. Today, customers need payment systems that are convenient, prompt, and secure. And that is where Bitcoin comes in. Most people feel that cryptocurrencies such as Bitcoin are catalysts for a new payment revolution that will impact profound changes to online transactions.
How Bitcoin Will Impact Online Payments
Bitcoin has inspired significant transformations in payment systems. It has convinced governments of the possibility of digital currencies. For example, the Chinese government now has independent crypto accessible on the Bitiq.org platform. In 2021, El Salvador made Bitcoin a legal tender. Here’s how Bitcoin will influence online payments.
Low-cost Transactions
Traditional online payment solutions are subject to government regulations. That means banks and money processors must use other institutions to process payments. Besides, those institutions also levy additional charges on customers, including withdrawal costs and account maintenance fees. Those costs impact a substantial financial burden on customers.
Bitcoin solves that problem by eliminating intermediaries from transactions. Unlike bank transfers, Bitcoin payments occur exclusively on a peer-to-peer network, without any third party. Besides, Bitcoin users do not require bank accounts to transact, eliminating the vast costs levied by banks and money processors. That ensures relatively lower transaction fees than bank transfers or credit cards.
User Autonomy
While various online payment options exist, the service providers are under government and central banks regulations. One of the critical requirements for using them is that the person sending or receiving payment must disclose their real identity to the service provider. Then, the company will also share that information with the other service providers in their networks to process payments.
Such restrictions hinder customer trust, exposing them to various risks, including identity theft. Bitcoin is a decentralized currency not linked to government regulation or the central bank. Thus, it enables people to send and receive payments worldwide without external intervention. Besides, Bitcoin users do not have to disclose their real identities to transact.
Bitcoin allows its users even to transact anonymously, giving you full rights and control over your money.
Flexible and Prompt Payments
Bitcoin enables businesses and individuals to transact without the inconvenience of carrying around too much money in cash. Bitcoin allows users to pay for goods and services online with just the click of a button. Thus, you don’t have to wait for bank approval to send or receive money, ensuring greater convenience. Bitcoin transactions usually last a few minutes to process.
Bitcoin users can choose between hardware and online wallets. The wallets enable users to send, receive and store funds at their convenience. Besides, you can transact through a personal wallet or a crypto exchange platform.
Merchants are increasingly adopting Bitcoin into their payment systems. Statistics also reveal global consumers are rapidly embracing crypto as a more convenient, secure, and low-cost payment method. Bitcoin is still a new concept to most people but, it has an enormous potential to revolutionize online payments.