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The use of innovative fiat on-ramps can help bitcoin overcome its high card fees.

13-Jun-2022 By: Shikha Jha
The use of innovativ

The use of innovative fiat on-ramps can help bitcoin overcome its high card fees.

Decentralized technologies are crucial in attracting new investors to the cryptocurrency and Web3 ecosystems.

Being in crypto is all about having a rational approach to money. As layer 2 solutions like the Lightning Network take off, we know that Bitcoin (BTC) is the way of the future, both as a store of value and as a means of payment. As a result, it is critical that every cryptocurrency user always obtains the most competitive price for each service. While millions of crypto users convert cash to crypto using a debit or credit card, this is not an inexpensive option.

Converting cash to crypto to cover the costs

According to The Motley Fool, customers who pay for cryptocurrency with their credit cards may face additional costs of up to 7%. If you buy $1,000 in Bitcoin with a credit card, your card issuer may charge you up to $70 in fees if the transaction is treated as a cash advance, in addition to the regular processing fees and charges.

While cryptocurrencies are widely available, one of the most significant challenges to widespread adoption is bridging the gap between the crypto and fiat worlds. Failure to do so has resulted in the majority of people either not having the tools they need to participate with digital currencies or paying outrageous fees to interact with the ecosystem.

A cryptocurrency investor or user can carry out a wide range of cryptocurrency transactions, each with its own fee structure. The cost of any particular crypto transaction might change often and without warning, necessitating users' constant monitoring of such costs, which is time-consuming and inconvenient when moving in and out of positions fast.

We live in a time when so-called disruptive fintech services and applications, such as Revolut, a digital banking app, are bringing a more smooth banking experience to the masses. Users are still being stung by pricey, clumsy solutions that are more analogous to cashing in chips at a casino than purchasing the future form of money when it comes to converting fiat to crypto.

On-ramp fees are being combated by exchanges.

Exchanges like Bitfinex are incorporating cutting-edge technology into their platforms to make changing money to crypto as simple as possible. Bitfinex's users can now transfer fiat currency from their bank account to the Bitfinex platform for just 50 cents per transaction thanks to a partnership with OpenPayd, a digital provider of banking and payment solutions. The service is currently only available in euros, but the exchange plans to expand it to other major cryptocurrencies in the future.

Other exchanges are also attempting to reduce the cost of purchasing cryptocurrency by releasing software development toolkits that will allow self-custodial wallets like MetaMask to offer users a new way to purchase or transfer cryptocurrency to their wallets. Users' onboarding into Web3 will be streamlined, and fees will be reduced when moving existing crypto balances from their accounts to a self-custody wallet/DApp using these new sorts of services.

By upgrading old rails, the cost of onboarding can be reduced.

With the introduction of Web3 and cryptocurrencies, the outcome of these payment technologies may very well validate the 2017 prediction that the age of credit cards is drawing to a close. Major payment solutions and service providers like FIS and BCB Group, as well as newer startups like Fireblocks, are developing new fiat-to-crypto solutions in order to create instant settlement networks between local currencies and stablecoins. As a fresh crop of solutions become accessible for all organisations that are poised to touch cryptocurrencies in some way or another in the future decades, these new technologies are likely to turn the outmoded payments infrastructure on its head.

As retail and institutional money pours into cryptocurrency markets, nearly every major corporation is focusing on reducing the onboarding process and making cryptocurrency payments more secure, accessible, and quick. These businesses will be able to pass on savings to their customers as a result of their efforts. It is an unnecessary barrier for investors to charge hefty fees only to shift fiat dollars into and out of the crypto ecosystem. Exchanges' fiat on-ramps and off-ramps are critical for onboarding new investors into the crypto and Web3 ecosystems.

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