Cryptocurrencies for payments. How much are they convenient?

Cryptocurrencies for payments. How much are they convenient?

By MikeZillo | Smart Crypto Investing | 29 Oct 2020


In Italy we still have an important trend of payments carried out with cash and payment cards are becoming more used just in the last years.

This is a due reason, since cash does not have expenses to be received and transacted.

What the costs for the POS available in Italy?

fees

Source: it.mobiletransaction.org

In the best scenario the merchat would have to pay 1.00% with the iZettle provider, assuming it is going to transact more than 35.000€ in one month but you will still have the 20€ monthly fee, that on a 35.000€ base transaction volume, it would set the total fee at 1.05%. 

I agree with you: 1.05% is not so bad as a total transaction fee, but banks may add some transaction costs, since iZettle is just a payment provider and those commissions are the ones referred to it. Not to banks sending or receiving payments.

Furthermore I have to point your attention to another aspect of payments: how much is the margin of the merchant? I tried once to purchase some stamps in a small shop, the ones that sells cigarettes, and other small stuffs. I tried to pay with the Company’s Debit Card and they told me that they did not accept card payment because their commercial margin was too low. The woman in charge also explained me all the commercial margins they have, since my face probably expressed all my disappointment. The highest margin they could have was 5% on cigarettes, and less than 3% on the “Scratch and Win”.

I could bet that with those margins, electronic payments were not accepted.

How cryptocurrency may help in this way?

There are a couple of centralized payment providers such as Coinbase Commerce and Coinpayments that will allow the transaction to happen with just 0.5% fee on the conversion.

Anyway, transaction can even happen without the integration of such commercial tools, using a Coibase Institutional Account to receive cryptocurrencies, and then to be converted into fiat, avoiding the Coinbase Commerce fees. Otherwise, a payment can also be handled directly via Wallet, using native wallets to send cryptocurrencies. I have in mind MyEtherWallet that, among others, gives you in real time the fiat-value of the transaction.

And what about the fiscal treatment of cryptocurrencies?

Well, in Italy cryptocurrencies are simply considered as tools to transfer value between parties, that means that if you change it immediately you will turn the reporting in fiat currencies, otherwise you will be exposed to cryptocurrency volatility.

Keeping cryptocurrency and not converting may expose the merchant to a capital gain (to be taxed at the end of the accounting year), or a loss, to be reported at the end of the accounting year. Since merchant are not usually financial trader or cryptocurrency trader, consultants usually suggest to immediately convert cryptocurrency upon receival.

If you have store that accepts cryptocurrencies, you can use this map (https://coinmap.org/view/#/map/) to register them, and give them a shout among the crypto-friendly niche.

 



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