If you have traveled abroad and tried to use your debit or credit card outside of your own country (or block, such as the EU), surely you’ll have experienced the unpleasant sensation of getting charged more money than everyone else around you just because your card is different.
If you have bought stuff online from outside your country, then you will have experienced the same. You go on Google, you convert the currencies, and, lo and behold, you are paying more than you thought you would.
Why is that?
That is because banks are still living in the ’60s (it’s not their fault! We don’t hold it against them!)
Credit and debit cards are older than you think
Unless, of course, you’ve read our History of Money series. The first internationally accepted credit card was introduced in 1948. In 1966, BankAmericard became the first licenced all-purpose credit card.
What has changed since then, you ask?
The answer is: not a lot.
Some technological advances made the usage of credit cards easier or safer, such as the introduction of the magnetic band in the early ’60s or the first chip-based credit cards, introduced in Europe in the ’80s, but the underlying processes are basically the same.
The same banks run the same operations and verify transactions in the same way.
Whether you are using your chip or contactless, whether you’re verifying your purchase with a PIN code or a fingerprint scan, it all leads back to your credit card account, which hasn’t changed in 60 years.
Borders and exchanges were a massive deal before the Internet
Here are some interesting stories about how credit cards were processed by merchants before the Internet became ubiquitous.
It is easy to understand why exchange rates were necessary before, say, the ’90s. And not just for credit cards, of course (I know it seems we’re picking on the old faulty tech!), but also wire transfers and any kind of money movement whatsoever. Everything had to be verified by a human being, sometimes using physical records, and the whole thing was morose and costly.
That, of course, isn’t true anymore.
Border fees were made up by banks in 2005
I bet you didn’t expect that date.
Well, it’s true. Border fees quite simply didn’t exist before, and all the boring busywork we described was covered by currency conversion fees.
But then came the Internet.
The busywork disappeared, the lion’s share of it automated, and merchants quickly realized that they didn’t really need to pay the inflated conversion fees when the Internet provided easy and simple access to banks that supported multi-currency processing or easy means of communication with distributors based in the same place as the buyer.
Traditional institutions, however, didn’t look at the loss of revenue kindly, so they implemented a new fee. Mastercard and Visa started charging cross border fees in 2005 to make sure merchants and buyers were paying the equivalent to a currency conversion fee regardless.
We feel like that was a disservice.
The Internet doesn’t care where you are based. There are no added costs for the usage of a network or a payment processor if your business’s headquarters are in the UK or in Norway.
An alternative became a necessity, to incentivize everyone to do their best for merchants and customers.
We are that alternative.
Crypto is borderless
Regardless of what your currency of choice is, whether it’s Bitcoin, Ethereum or our own UTK, your wallet has no homeland and no nationality.
You can pay for whatever it is you’re buying from any nation to any other nation, and it really is no one’s business except yours and the merchant’s. The blockchain doesn’t know or care where your business is registered.
And there are no conversion fees either (trading is another matter, of course), as long as the payment processor can handle the currency you’re intending to use.
Outside of governments that try to make it their business to overregulate the Internet (and we are aware this can be an issue), no centralized institutions such as banks or credit card issuers can do with crypto what they have done with fiat.
We are doing all of this as you read
Utrust is providing a real alternative to traditional banking. Our solution is safe, foolproof and fast. In fact, here’s how we go about this issue:
A growing market: Over 300 million people are using crypto, all over the world. This number is growing, and it won’t stop growing anytime soon.
Foolproof security: No chargebacks. Transactions are immutable and saved in a public ledger.
No border fees, no hidden fees: Ever. We charge a 1% flat fee, period. No exceptions.
No volatility: No crypto accounting, no surprises. Get paid in fiat in your bank account, as per usual.
Go global: We are borderless, and your invoices can be too.
Wallet agnostic: Your customers can pay with their preferred wallet, whatever it is.
Some of the greatest brands in the world are already using it: Homeplay, Fast Private Jet, Arburton, Lotus and Caterham Silverstone, Cubelogy, Nikola Brussels, Watches of Wales, Gravity coLiving, Aurelia Ventures, Excellium Limousine, Ureeqa, Bwise Media and Arms & McGregor.
Adoption of this technology is a necessary step to protect both consumers and merchants from intermediaries that are living off of both.
Next week, we will be telling you about security.
Don’t miss it.
