At the beginning of the year, credit card company Visa announced during its earnings call that the usage of cryptocurrencies as payment options is steadily increasing. The company stated over $1 billion worth of digital currencies was spent by consumers worldwide through Visa’s crypto-linked cards in the first six months of 2022.
That’s a staggering figure and a clear indication the cryptocurrency ecosystem is growing. Visa’s rivals, Mastercard, found similar evidence through research, stating that more than 90% of consumers in North America plan to use crypto for payments in the next year. However, some people may still be confused over the difference between cryptocurrency transactions and traditional credit card transactions. We will explore these differences today.
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Which Industries Accept Crypto As A Form Of Payment?
One of the most important things businesses can do is adapt to market trends and changes. Many companies have realized the impact crypto transactions are having on the financial industry, and they have started accepting virtual currency payments because of this. Some of these industries include sports, the food and beverage market, the video gaming and iGaming markets, and the airplane sector.
For example, NBA team the Dallas Mavericks accepts Bitcoin as payment for merchandise and game tickets. Since 2019, fans can make Bitcoin transactions through the team’s website, which is processed by BitPay. BitPay is a Bitcoin payment service provider that provides Bitcoin processing services for a range of merchants. Likewise, airlines such as Norwegian Air have started accepting cryptocurrency payments, and so have restaurant chains like Pizza Hut, Subway, and KFC.
These transactions are also growing in popularity in the video gaming and iGaming markets. Twitch is a great example of this, as the game streaming platform accepts both Bitcoin and Bitcoin Cash as payment for its gaming services. You can also use crypto to play online casino games, such as playing crypto roulette at Metaspins, which can see you winning a monthly share of Bitcoin by spinning on selected titles. You can also play crypto slots, crypto blackjack, and crypto baccarat.
Crypto Transactions vs. Credit Card Transactions
A primary difference between cryptocurrency and credit card transactions is the lack of intermediaries involved in crypto transactions, such as Bitcoin transactions. To date, Bitcoin is the biggest cryptocurrency held by users, followed by Ethereum, EOS, Litecoin, and Bitcoin Cash. You don’t have to go through a financial institution to make cryptocurrency transactions; the only two parties involved are the sender and the receiver.
Transactions are recorded in a blockchain, and processing is conducted through private computer networks. That is different from credit card transactions, where your payments pass through a financial intermediary. Typically, five parties are involved in credit card transactions compared to the two in crypto. These parties usually include the credit card network, the merchant, the acquirer, the issuer, and the cardholder.
What Are The Advantages Of Crypto Transactions?
More control over your finances is one of the benefits of cryptocurrency transactions, and speed is another advantage. For example, you can pay on your mobile phone instantly using cryptocurrencies, whereas a mobile credit card payment moves through several stages before being processed and approved.
Likewise, there is more security with crypto since transactions of Bitcoin or Ethereum come straight from your digital wallet. That means you don’t have to hand your credit card over to a salesperson at the point of sale, where they may keep your information, or their credit card machines are at risk of being hacked. Cryptocurrency transactions are also irreversible, so you will never have to pay a charge-back demanded by a credit-card provider.
Are Crypto And Credit Cards Intertwining?
Some may look at cryptocurrencies as a direct rival of credit cards, but we’re also starting to see these financial instruments working together. For example, Visa has released crypto-linked cards. More people have also begun using crypto rewards credit cards. A crypto rewards credit card is a credit card that rewards users for using it to purchase goods and services with cryptocurrency.
By 2025, the crypto market is projected to reach $2.73 billion. Increased investment in the space is going to help the industry grow, in addition to global acceptance of cryptocurrency transactions in a range of industries, which we have already seen in retail, iGaming, and the food and beverage market.