$6.2 Billion Fine Paid by Major Banks, Will Merchants Switch Over to Crypto?

On Sept. 18, Visa, Mastercard and three major banks paid $6.2 billion in an antitrust settlement for forcing merchants to pay swipe fees and preventing them from utilizing other methods of payment.

Visa charges 1.51 percent on every transaction plus a fixed fee of $0.1, which may seem small on its own but becomes a large amount for merchants when taxes and other operating costs are added to the expenses of merchants.

Due to high network fees, lack of scaling solutions and efficient merchant-focused systems, it has been difficult for merchants to properly adopt crypto.

Over the past year, the cryptocurrency sector has seen a rapid emergence of merchant payment system providers like Coinbase, PundiX and UTrust, which offer both hardware and software solutions to merchants, with on and off-chain scaling of public blockchain networks like Bitcoin and Ethereum.

In the long-term, with crypto-integrated, point-of-sale machines; PayPal-like payment processing solutions; and customer protection systems, merchants could start adopting crypto as an alternative payment method.

An antitrust case for forcing merchants to pay fees and prohibiting merchants from encouraging customers to use other payment methods.

While the vast majority of investors in the cryptocurrency community expected merchants to adopt cryptocurrencies at an exponential rate, no viable products existed for merchants to clear cryptocurrency payments.

The emergence of crypto-based PoS machines, investor protection systems, payment networks and fully audited stablecoins like the Gemini dollar could encourage merchants to experiment with crypto once again.

Cases like the $6.2 billion settlement of U.S.-based financial institutions for mistreating merchants and consumers could motivate merchants to explore alternative payment methods.

In 2017, large-scale PoS networks and merchants like AirRegi, which supports nearly 300,000 merchants, experimented with crypto but struggled to implement cryptocurrencies at a large-scale due to various issues pertaining to regulation, infrastructure and volatility.