Bitcoin payment versus credit cardsadmin
Some people call bitcoin the internet money. With the right care, individuals can send and receive bitcoin payments online without disclosing sensitive information. Ideally, you don’t reveal your bitcoin wallet or account information when sending or receiving crypto payments.
Today Bitcoin is the most accepted virtual currency. People use services like the Immediate Edge App to trade Bitcoin. This platform offers the simplicity most people are looking for when buying and selling cryptocurrencies online. And you can register and start trading Bitcoin for free.
Bitcoin payment versus credit cards
But if your goal is to accept or send bitcoin payments, you might want to know how this cryptocurrency compares to credit cards. Well, with Bitcoin, a customer has to scan the company’s QR code with a mobile phone or a high-end laptop in order to pay for a service or commodity.
Bitcoin payment service explained
A bitcoin payment service allows a business or merchant to receive payment via this cryptocurrency for services and goods upon delivery or sale. This option works the same as processing a regular debit or credit card payment. It is also known as Bitcoin trader service. The only difference is that the process involves bitcoin instead of fiat money.
When shopping at a local store, swipe a credit card at checkout and then enter a PIN to complete the transaction. You can also pay for a product or service online and pay with your credit card by sharing the payment details.
In both cases, a payment system is involved that allows authentication and eventual processing of the credit card to complete the payment. This system records and securely transmits the payment details and authentication details to facilitate the transfer of funds from the customer’s account to that of the store. The system also issues an acknowledgment to the parties involved.
A bitcoin payment service works in almost the same way. It works as an intermediary between buyers and sellers and processes bitcoin payments. And in this process too, the transactions are recorded in a public ledger that uses blockchain technology.
Merchants can therefore accept bitcoin payments at physical and online locations. And they don’t have to worry about how bitcoin payments work in the background.
How bitcoin payments work
Paying for a service or product with Bitcoin is very easy. Here are the steps of the payment process.
A customer decides to pay in bitcoins when they reach the checkout in a store, app, or on the web.
It sends a certain amount at a fixed exchange rate, which is in effect at the time the transaction is completed.
The payment service instantly converts the paid bitcoins into the chosen currency, eliminating the risk of volatility.
The system adds the funds to the merchant’s account and credits them to their preferred bank account at a set frequency when the accumulated amount exceeds a threshold.
The payment service securely transmits all necessary details to the blockchain network for authentication and recording. Miners verify the bitcoin transaction and then add it to the blockchain, earning them a miner’s fee. Essentially, this fee is the reward miners receive for verifying and authenticating bitcoin transactions.
The rising overall adoption of bitcoin indicates that more and more global users will transact in this cryptocurrency. The ever-growing influence of a borderless economy not under the control of a central authority is putting traditional credit cards at risk. With the increasing number of people and businesses accepting cryptocurrencies, credit cards dependent on fiat currencies will most likely take some heat. Nonetheless, credit card providers must embrace the evolution and technological advances that the new offerings bring. Therefore, they should also come up with innovative ways to effectively compete with the Bitcoin payment service.