Many Americans are fed up with credit card fees.| Photo by Robert Nickelsberg/Getty Images.
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Key Takeaways
A recent Coinbase report estimated that in 2022, Americans could have saved at least $74 billion in credit card transaction fees by using blockchain payments instead.
The savings would equate to $600 per household.
Switching from cards and bank transfers to crypto has other advantages too according to Coinbase.
Collectively, American consumers could save tens of billions of dollars in card fees each year by switching to blockchain-based alternatives, the latest research by Coinbase estimates.
The figure, from Coinbase’s State of Crypto report published on Wednesday, February 7, highlights how crypto transactions could dramatically reduce costs when compared to legacy payment rails.
American Consumers Are Fed up With Card Fees
According to Coinbase’s survey, 71% of American consumers want cheaper transactions, while the number and cost of fees were found to be the 2 most commonly cited reasons for dissatisfaction with the current financial system.
When asked about the potential of crypto payments, survey respondents listed ease of use and affordability as the top 2 advantages posed by blockchain-based solutions.
With the average credit card fees typically ranging between 2-3%, the report observed that blockchain-powered payments could be up to 5,000 times cheaper.
What’s more, Coinbase estimated that in 2022, Americans could have saved at least $74 billion in credit card transaction fees by using blockchain technology instead – an average saving of $600 per household.
Not all Blockchains are Equal
Of course, while some blockchain platforms are significantly cheaper to transact with than card schemes or interbank payment networks, they aren’t all suitable for everyday payments.
As users have embraced cheaper networks like Tron and Solana, in recent years stablecoin transactions have migrated away from Ethereum en masse. What’s more, although Coinbase emphasized digital dollars, blockchain platforms like RippleNet have the potential to reduce the cost of fiat payments too.
Other Advantages of Crypto Payments
As well as being cheaper, Coinbase observed that crypto payments can deliver much richer functionality than traditional options.
For example, citing ASICS’ collaboration with Solana Pay, which saved the company over $22,000 in fees from the sale of a limited-edition footwear release, the report noted that the platform could help establish a direct connection between businesses and their customers.
You can now purchase @fresh_fragrance products using USDC on Solana, as they have integrated Solana Pay!
An everyday stablecoin payment application designed to rival existing fiat-based solutions, Solana Pay creates a unified messaging scheme that can be used to embed loyalty rewards, offers, and post-sales services into retail transactions.
Of course, in theory, this kind of connected, integrated payment system should be possible with fiat too. But progress has been slow, and aside from a handful of open banking success stories, traditional financial services have largely failed to deliver.
James Morales is CCN’s blockchain and crypto policy reporter. He has been working in the news media since 2020, writing about topics such as payments, banking and financial technology. These days, he likes to explore the latest blockchain innovations and the evolving landscape of global crypto regulation.
With an educational background in social anthropology and media studies, James uses his platform as a journalist to explore how new technologies work, why they matter and how they might shape our future.
