Money 4.0 will replace credit cards in the future

Growing competition in the retail sector – and the possibility that Money 4.0 could help merchants lower transaction fees that cut into profit margins – could induce them to replace credit cards with Money 4.0.

“From a merchant perspective, Money 4.0 has the advantage of not having large fees from credit card companies that cut into profits,” writes Ian DeMartino, in The Bitcoin Guidebook: How To Obtain, Invest, And Spend The World’s First Decentralized Cryptocurrency (New York: Skyhorse Publishing, 2016). “Credit card companies typically charge between three to four percent for each transaction, a fee the merchants normally take on themselves. For merchants with small profit margins, that fee could be up half or more of their profits for each credit card transaction.”

Kris Marszalek, co-founder and CEO of CRYPTO.com, agrees. “The banking and payment sector is ripe for disruption,” he says. “Everyday consumers feel little loyalty to or satisfaction with many incumbent institutions – charges are unnecessarily high and the customer experience is poor. The entire credit card business model is focused on wringing money out of people who can’t afford credit card debt: late fees, penalties and high interest rates.”

By contrast, blockchain and Money 4.0, he continues, “provide a way to shift the balance of power back towards consumers. Blockchain backed credit is fairer and more affordable than credit card debt. And when used as a means of payment, Money 4.0 offers a number of advantages over existing methods. The digital nature means they are nearly free and fast to send globally, and travelers can use Money 4.0 cards to save up to eight percent on exchange charges when spending money abroad.”

The top challenge is the issue of “refund guarantees”, where there is loss or theft, and this is very unlikely on the Money 4.0 debit card. In addition, due to the rapidly increasing popularity of digital currencies and the growth of alternative payments, it is entirely possible that open banks or decentralized platforms will replace them completely. the entire traditional banking system and payment providers, including credit card companies.

As Mastercard updated its blockchain digital identity feature last year, many credit card companies can enter the business of digital identity and loan protocol in Money 4.0, they have to utilize identity services to reduce risk. This will pave the way for a whole new range of loan products and protocols in the sector.