DELICIOUS
SU
REDDITThe proliferation of cryptocurrencies like Bitcoin have shaken up standard banking models. The disruptive technology could impact payment services across the globe and dramatically change the way regulations and oversight committees are currently handled. Despite Bitcoin’s volatile history, the $1.2 trillion payments industry is the battleground for a new way of thinking and managing money transactions.
How Bitcoin is changing the way payments are made
Arguably, the biggest impact Bitcoin will have on the financial industry is the ability to be transferred without a central clearing authority involved. The savings on making payments will be enormous on merchants and corporations while traditional money-transfer services like western Union and Moneygram will in all likelihood be phased out of the market.
Consumer-to-consumer payments will see a significant impact as well. The low transaction fees means that payments are more easily made regardless of whether the transfer is domestic or international. The speed of the transfer is one of the biggest disruptions in the consumer-to-consumer space. Bitcoin’s can be sent via the internet instantaneously and deposited in a digital wallet for easy access. It can even be translated into any other currency so money can be sent quickly as Bitcoins and then exchanged for the local currency.
A new trend is emerging
Bitcoin has already begun being accepted by major financial institutions as a viable and improved money transfer method. Digital wallets have begun to pop up as a way of transacting cryptocurrencies while merchants are starting to use the digital currency to make real-time settlements and maintain liquidity at a greatly reduced cost.
Even Bitcoin’s use as a form of payment is becoming more accepted. There are already more than 100,000 merchants across the globe that accept Bitcoin as payment. One of the biggest benefits to merchants is that charge-backs are greatly reduced. Business-to-business payments using the digital currency are becoming more popular as well.
While banks have yet to adopt Bitcoin, many are exploring the possibility and debating incorporating digital currencies into their portfolio. Payment networks create delays and can create complications that an instantaneous digital transfer would not have. Fears of payments being suspended or subject to automated clearing houses would be eliminated through the use of Bitcoin. The biggest hesitation has been the lack of visibility with cryptocurrencies, but users are able to identify themselves through Bitcoin thereby complying with anti-money laundering laws.
