Engaging in traditional payment systems sometimes causes the client to pay extra charges called transaction fees. This adds on the total amount of the in-voice, sometimes without the client’s knowledge.
Transaction fees, according to a financial dictionary, are charges that a dealer assesses on a client service of filling an order. The rate of transaction fees are sometimes based on a percentage of the value of the transaction. It is also a percentage of the transaction that helps to cover authorization costs, fraud, and credit losses.
Some example of traditional payment systems are over-the-counter bank transactions and ATM card transactions. Using this method, processing fees can run about 2% of the amount per transaction. This high transaction fees can really sum up to a very high amount, deducted directly from the client’s account.
There are various reasons why traditional transaction fees are high. One of which is that traditional money transfer uses many gateways before the user receives the amount. Sometimes, this could take up to 6% of the total amount of the transaction. This is because this method uses more than one bank in order to transact the money successfully.
On the other hand, with digital currencies, there is zero to less transaction fees unlike with high fees charged by traditional payment systems. For instance, with Radar Lab, it offers high frequency trading. Moreover, it also allows the users to trade any digital assets on the Radar network on both virtual and traditional currencies.
Another advantage that this platforms offer, next to low fees, is convenience. With digital currency platforms, the user can do his transaction directly without the use of third-party traditional platforms. Hence, the user does not longer need to pay for the transaction.
Moreover, transaction fees could really sum up to a large amount after a period of time. Buyers and sellers look for alternative ways to reduce high fees. One of the techniques you can consider is to use cheaper online payment services. Like with digital currency platforms, there are accounts available for free transaction. The user just needs to provide basic information in order to create his or her account successfully and to start the transaction.
Another way how this platforms reduce fees is that it can be used globally without regional limits. Sending money over the country may require additional fees in converting money to traditional currency. But with digital currency, it can be sent and received directly without conversion.
Sooner or later, it will outweigh traditional currency because of these advantages. Digital currency just not saves time, but it also saves the money that will be spent for the high transaction fees.