When accepting debit and credit card payments, merchants are required to pay a fee for every purchase made to the card-issuing banks and the credit card associations like VISA or MasterCard. These fees often include both a percentage of the value of the payment and a fixed dollar amount for each transaction. These fees vary, but they are usually around 2% + a static fee of $0.10 for each transaction. This type of fee, where not only a percentage, but also a static fee is charged, has a huge impact when you consider the consequences on both small and big purchases. Where small purchases will be highly affected by the static fee, and large purchases will be highly affected by the percentage fee, depending on the profit margin. There is another way, however.
Using cryptocurrencies, transaction fees can be set by the sender according to the time he’s willing to wait for a confirmation. An average fee for a Bitcoin transaction is 0.0005 btc, currently worth around $0.34. This makes Bitcoin suitable for medium to big size purchases since the value of the fee remains static no matter the amount of the transaction. Furthermore, transaction fees are only charged to the sender (while banks and credit card associations charge fees on both sides). Furthermore, there are no fees to setup a cryptocurrency wallet and merchants can even take advantage of merchant-ready services that are completely free of charge.
In this case, we see that Bitcoin is not suitable for small purchases. However, other cryptocurrencies like Bitshares are currently capable of handling small to micro transactions with extremely small fees and to provide stable price tokens that are pegged to national currencies (which is a great advantage for users that don’t want to deal with volatility). Furthermore, micro-payment solutions are being thought of and developed for Bitcoin in the form of sidechains and payment channels.
Projects like Exscudo are currently paving the way for mainstream merchant adoption, which may become a reality sooner than first thought. The Exscudo merchant platform allows businesses to accept cryptocurrencies legally and easily. All they need for that is the Exscudo software and an account. Customers will be able to pay with debit cards or NFC. The cryptocurrencies are converted according to the current exchange rate on the Exscudo Exchange with a minimum spread.