The concept of cash is right on the way to becoming extinct, as the vast majority of people rely on digital payments in their daily and business activities. However, this digital field is undergoing a serious split between traditional banking methods and cryptocurrencies.
Which of them is faster? Which costs less and is easier to use? Find answers to each of these questions below to get a clearer picture of where the world stands now and where it might be heading in the near future.
Traditional and Crypto Payments: The Basics
Before exploring the key differences between crypto and traditional payment methods, let’s establish what they entail.
Crypto Payments
Crypto payments rely on blockchain, a digital system that records every transaction on a public ledger. They don’t require the involvement or approval of the bank. Instead, they are based on:
A decentralized network of computers that work together to verify and record all transactions.
Cryptographic verification that makes sure no payments are forged, which increases user security.
Digital wallets where people can store their crypto and through which all the funds are managed.
Many frustrating online regulations apply to crypto websites and projects, but fortunately, it is no longer a serious problem. Website owners and other determined businesses can hire crypto SEO services to optimize their content for search engines, making sure that their products find their target audiences. With this solution, crypto adoption has become much more lucrative and convenient; we’ll discuss it in more detail later.
Traditional Payments
Traditional payments are processed through banks or other financial institutions. These are debit and credit cards, bank transfers, mobile app accounts connected to your bank, etc.
The money travels from your financial organization to the one your recipient uses. It means that there is always a middleman involved in each transaction. How does this fact affect the speed of transfers? Let’s find out below.
Crypto vs. Traditional Methods: Comparing Key Nuances
Time to compare both crypto and traditional payments in terms of three crucial aspects: speed, cost, and the width of adoption.
Speed
The speed of traditional payment methods depends on the bank and the method of payment. In most cases, the funds arrive within 24 hours; if we’re talking about international transfers, they could take up to 5 business days.
When delays occur, it happens because most banks work strictly during their business hours. Holidays might be a factor, and several parties must confirm the transfer before it passes through.
Crypto payments, on the other hand, have no such speed-related barriers. The systems supporting them work 24/7, so regardless of time or location, you will be able to get or send your money immediately. It’ll arrive within a couple of seconds or minutes.
Cost
Now, what about the cost, such as the fees or other hidden charges? Here is what you need to know about traditional banking methods in this regard:
There are fees for most transactions: the sum depends on what card you’re using and sending money to.
If you’re making international payments, you’ll need to pay some currency conversion fees, too; every intermediary will take their cut.
Fees for having an active bank account are also applicable in many cases: once again, this depends on what bank you’re using.
The good thing is that there aren’t any hidden charges. You’ll see how much you’ll need to pay in fees before confirming the transaction.
Crypto payments might require some fees, too, although they tend to be lower than those involved in traditional money transfers. You might have to pay a network and a wallet service fee.
There are no set prices that would apply universally: they change based on how busy the systems are and other factors. However, despite these fluctuations, crypto fees are always pretty small, ranging from $0.01 to $5, even for international transfers.
Adoption
Traditional payment methods have been the default choice of the entire world population for years. This is still the case, as almost every country supports standard banking and allows its residents to pay with their cards or phones. The process is familiar, so people often don’t think twice before using it.
Lately, though, the situation has been changing a little. The number of people using cryptocurrency has tripled in the last several years. As statistics show, young adults are the target consumers of all crypto-related services: most users are around 30 years old on average, and their numbers are growing annually.
So, crypto is faster and cheaper. Why has it failed to earn the leading spot as a payment method, then? There are several reasons for it:
Technical complexity, as many people simply don’t understand how crypto works; the concepts of private keys and blockchain make them confused and hesitant.
Price volatility is another complicating factor: some people are reluctant to interact with a currency that can lose its value in a blink.
Many businesses and countries in general don’t recognize crypto as a valid payment method, so users can’t switch to it.
Some solutions are already being developed, like the introduction of stablecoins and crypto SEO. However, adoption remains uneven for now.
Traditional or Crypto: The Verdict
For now, there is no clear answer as to whether you should use crypto or traditional payment methods. Both have their pros and cons; both can be helpful and frustrating.
Traditional methods remain the most widely used options, as they are common and easy to understand, unlike cryptocurrency, which comes with many complex technical nuances. Many people simply refuse to grasp them. Crypto, in turn, is a much faster method, which is a clear advantage.
Both options have no fees, but crypto wins in this category because you might still have to pay for conversion when paying traditionally. At the same time, the value of crypto might fluctuate based on current market rates, which can change the amount you have in your wallet for better or for worse.
If you appreciate speed and anonymity, you should definitely consider getting a crypto wallet. If you value consistency and familiarity above everything, traditional payment methods are the best option for you. Consider your needs and preferences, weigh the pros and cons, and make your decision.