Since Bitcoin emerged in 2009, the cryptocurrency market has expanded as very few people expected in the early days. More and more people join the crypto revolution every day. The public perception of cryptocurrencies dramatically changed in 2021 when financial institutions began investing in cryptocurrencies. Additionally, several traditional payment systems like Visa, Mastercard, and PayPal made the necessary arrangements to adopt cryptocurrencies as another form of payment.
Traditionally, payments made by individuals and businesses have been in banknotes, credit and debit cards, checks, direct transfers, etc. These methods effectively transfer funds and settle transactions, allowing buyers and sellers to exchange value for goods and services. However, they all rely on centralized intermediaries like banks and financial institutions. In contrast, cryptocurrencies can provide users with a new level of financial autonomy and privacy by enabling them to transact directly with one another, away from banks and other intermediaries.
The consumer interest in paying in crypto is on the rise, especially among the young population (18-35 years old). However, merchants are also interested in accepting cryptocurrencies as payments because of the many benefits for their businesses. Primarily, payments in crypto can cut transaction costs, eliminate intermediaries, and attract new customers. Currently, over 15,000 businesses worldwide accept crypto payments. Hence, traditional payment providers have been forced to establish partnerships with crypto companies to match the rising demand from customers and vendors to use cryptocurrencies.
Although many financial institutions remain skeptical about using cryptocurrencies, several leading traditional payment systems like Visa, Mastercard, PayPal, Stripe, and Venmo have already integrated solutions to allow users to pay with cryptocurrencies. Of all these companies, Visa, one of the giant payment processors in the world, has shown the most progressive attitude towards cryptocurrencies. The company has recognized the enormous potential of cryptocurrencies to disrupt traditional financial systems. Hence, the company has taken steps to integrate and support various aspects of the crypto ecosystem. Let us review these steps.
Visa Partnership with Crypto Platforms
Visa has established partnerships with leading crypto payment processors and exchanges, enabling users to spend their crypto assets seamlessly. When Visa cardholders realize payments at a point of sale, their crypto funds are automatically converted to fiat money thanks to the said partnerships. This way, cardholders can use their cryptocurrencies in many businesses. Visa has also integrated with several leading crypto wallets, allowing users to manage and spend their crypto holdings via Visa-enabled cards easily. Also, Visa has developed crypto-backed debit cards. These unique Visa cards enable users to load crypto onto a card, which they can use just as any other Visa card.
As of 2021, more than 200 crypto exchanges had partnered with Visa. Crypto-backed Visa cards have empowered many more people to use a debit card. A leading crypto card provider reported a 500% increase in these cards from 2019 to 2021. Unbanked people who could not get a debit card can now get one using cryptocurrency. According to a Visa report, this payment system processed over $1 billion in crypto transactions in Q1 2021, which increased to $2.5 billion in Q1 2022.
Conclusions
The mass adoption of cryptocurrencies will become a reality in the coming years, despite adverse events like the crypto winter of 2022. Consumers and merchants are increasingly interested in using cryptocurrencies for goods and services payments. Some obstacles, like price volatility, hamper the use of crypto in daily payments. However, traditional payment processors are finding solutions to integrate crypto into their systems. Of these companies, Visa has taken the lead with significant steps toward integrating cryptocurrency as another form of payment.
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Disclaimer
Please keep in mind that the above information is based exclusively on our observations and is provided for informational purposes only. It doesn’t constitute any kind of financial advice nor represents an official forecast. Cryptocurrency is a highly volatile asset, and you are investing in it at your own risk.
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