Since Bitcoin (BTC) was thrust into this world, its crusaders understood that it was created to be an alternative to the incumbent financial system. Case in point, Satoshi Nakamoto, the pseudonymous coder behind the cryptocurrency, embedded an outline discussing 2008’s Great Recession into the coinbase of Bitcoin’s first block.
While this underlying raison d’etre has been misconstrued by onlookers, this industry’s fervent believers have kept anti-establishment sentiment sequestered away for when the time is right.
With both Visa and Mastercard purportedly looking to hike transactions fees across the board, some crypto commentators have argued that this makes decentralized money’s value proposition more apparent than ever.
Get Ready For A Credit Card Fee Bump
Although plastic — credit/debit cards — are convenient, they aren’t without their costs. Visa and Mastercard, the two powerhouses in this 21st-century game, take small slices of the retail pie at every corner possible. The two firms’ enamorment with taking fees has purportedly led retailers to increase the price of goods and services by upwards of 1%, just to maintain their bottom line amid a plastic-rife economy.
Per an exclusive report from the Wall Street Journal, credit card companies are preparing to hike fees, putting pressure on retailers, and consumers by extension. Citing “people familiar with the matter,” the respected outlet claimed that by April, the two heavyweights will have increased interchange fees, which consumers pay to banks, along with processing fees that pertain to institutions in Visa’s and Mastercard’s networks.
While no exact specifics were cited, CMSPI, a merchants-payments consulting group, estimated that from April 2019 to April 2020, Visa’s newfangled fees will cost American consumers an additional $570 million.
This news comes just weeks after Mastercard was slapped with a massive fine. The European Commission, a regulatory facet of the E.U., hit Mastercard with a hefty €570.6 million fine, which equates to about $648 million U.S. dollars. Europe’s antitrust entity claimed that the New York-headquartered payment giant, valued at $206 billion on the public stock market, “artificially” raised credit and debit card fees in the Union.
Mastercard purportedly accomplished this feat by preventing European retailers from accessing bargain bank offerings outside of their home country, leading to higher prices overall for merchants and consumers alike. The Commission thus added that this act limited competition across borders, stunting economic growth in the bloc.