As Walmart Canada feels that the fees being charged by Visa are quite high, so it has decided to stop and not to accept any kind of transaction via Visa cards. Hence, a good opportunity for Bitcoin to enter the market and give rise to a question – Will Bitcoin is a viable alternative that will overcome to Visa that provides a high payment process?
An Expensive affair – Credit Cards:
Credit cards are trying to give its best as it the convenient way of the payment cycle without any additional charge as so are much more popular among the customers. The transaction value as a fee is charged up to 25 % of the merchants who accept the credit cards. There are charge backs over any disputed transactions in which merchants are subject to, and eats into their profits. As per the retailers comment:
“ stores in Walmart Canada will stop accepting Visa Inc. cards as the credit card providers charge an unacceptably high fee to the merchants. ”
A Visa spokesperson said that even though Visa is offering one of the lowest rates available to the merchants, yet Walmart has made its decision of not accepting Visa cards in the country and they are quite disappointed in what Walmart has chosen to make their financial interests and put it forward of their consumers’ choice.
The control of the market is a strong duopoly:
The two companies Visa and MasterCard, both are dominant in the payment processor market. As per Nilson report: – These two companies ( Visa and MasterCard ) are accounted for having 92 % of its purchase transactions on the cards used globally in 2015. Other companies like Amex, Diners, Union – Pay and JCB account for the rest. Despite, a large number of the merchants who are accepting their cards, MasterCard and Visa have managed to keep the fees high in the transaction area.
Walmart has to pay a heavy cost:
The credit card companies are being paid over 100Mn dollars by Walmart Canada every year. This is a quite significant cost to those companies whose aim is to focus on maintaining the price affordable to its customers. On the other hand, MasterCard is offering its best of providing a lower fee system to its retailers having the purchase volume of over 3Bn dollars whereas, Visa does not. Hence, this is one of the reasons that why Walmart Canada has decided of not accepting Visa cards in a phased manner and has started updating the customers about its decision being made.
One of the Walmart Canada spokesmen said that the retailers have to pay more than 100 million dollars in credit card fee every year, but the specific transaction charges are the part of the confidential agreement.
Obvious advantages of using Bitcoin:
As compared to the payment procedures / processors like MasterCard and Visa, there are many other obvious advantages of using Bitcoin. There is no risk of any unfair or fraudulent charge – backs and no middleman to go for payment if you directly have an acceptance of Bitcoin. Due to Bitcoin’s price volatility, merchants are hesitant enough to use or deal it directly; there is a Coinbase processor that will remove that risk for a very small charge of 1 %. Moreover, Bitcoin has the advantage of being universal – the using of Bitcoin will give all the merchants a general and good level playing field and there is no as such special advantage that the crowd of large retailers is going to obtain through the use of Bitcoin.
(Foto: Sven/C BY-SA 3.0)