The beginning of the end of traditional payment processors? - page 3.

hatshepsut93

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Quote from: stompix on October 11, 2021, 07:47:43 AM

So, it is 2 million but 14 000 transactions per day, so, a bit more than 0.5% doing a transaction a day.
Not really the best figures but I wasn't expecting more anyhow, in order for poeple to spend be it fiat or bitcoin people must have money in the first place, and that's not one Salvador strong points.

That image says 14k transactions per day via ATM, but in the top right corner it says 65k transactions per second in dashboard, what does that mean? Is this like maximum theoretical capacity or something? Because not even Visa has 65k transactions per second globally.

stompix

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Quote from: Lucius on October 09, 2021, 09:25:26 AM

I agree that this will affect people’s decision to transfer BTC or USD, but in the case of El Salvador, we know that they have set up 50 Chivo ATMs in the largest US cities, which means you insert USD into ATM and automatically get BTC free of charge into your Chivo wallet, and then you send that same BTC for a minimal fee to any other Chivo wallet. Let someone correct me if I’m wrong, but I realized that the whole thing works that way.

They are not in the largest cities:

Quote from: hatshepsut93 on October 09, 2021, 11:46:34 AM

Isn't Chivo giving away $30 to anyone who registers? Of course a lot of people in a poor nation would want to claim free money. The article claims that millions of users were added to Lightning Network, while in reality millions of people just installed an app. Not a fact that they will use it in their daily lives. A lot of people will uninstall it once they claim the free $30 or will use it a few times per year. It's completely unrealistic to think that millions of people who a few weeks ago didn't care about Bitcoin are not "Bitcoin users" who conduct their purchases through LN.

Of course, the number of installs is meaningless to usage.
If we add the downlaods of every bitcoin wallet available in google play we end up with more addresses than the blockchain holds, so...

So, it is 2 million but 14 000 transactions per day, so, a bit more than 0.5% doing a transaction a day.
Not really the best figures but I wasn't expecting more anyhow, in order for poeple to spend be it fiat or bitcoin people must have money in the first place, and that's not one Salvador strong points.

LastKiss

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I only saw chaos from news in my phone when El Salvador adopted bitcoin as their main currency, a lot people confuse how to use it and instead exchange their free funds from bitcoin to USD. A lot people destroying Bitcoin ATM, a lot people only wants free money. It's hard when old people dont know what bitcoin it is, they only trust their old currency but I appreciate for EL Salvador to trying to make a change and make them role model to us.

finaleshot2016

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I don't believe that traditional payment methods will be phased out because some people, including those who use cryptocurrencies in their daily life, still advocate for them. Traditional payments are still used in various scenarios, and all I can say is that they are more efficient and practical in particular transactions involving large sums of money or valuable assets. It is merely the beginning of another payment method; it is not the end of the conventional manner; even in other areas, traditional systems are still preferred because they create better results, despite the fact that technology is rather advanced right now.

AicecreaME

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Quote from: Symmetrick on October 08, 2021, 11:51:17 AM

El Salvador became the first country where bitcoin was accepted as a means of payment. How has this affected centralized payment systems and what will be the trend in the future as more countries follow the path of El Salvador?

I recently came across an article https://www.kevinrooke.blog/el-salvador-and-bitcoin-two-weeks-in/. It talked about how bitcoin adoption proceeds in El Salvador, and there I discovered interesting facts.

Thanks to El Salvador, the Lightning Network received a powerful impetus in development. This happened thanks to the popularization of the Chivo wallet and the incentives that the government of El Salvador guaranteed when it was installed. In total, the Lightning Network gained about 2 million new users:

Many users began to actively use bitcoin payments and money transfer using the Chivo wallet and support for the Lightning Network. Consequently, the Salvadorans increasingly began to use bitcoin services instead of the usual banking or payment processors:

Quote

Most of El Salvador's banks and payment processors have user ratings of 2-4 stars, while Bitcoin related apps have user ratings of 3-5 stars.
Specifically, El Salvador's largest bank, Banco Agricola has among the worst user reviews on the top 20 charts. El Salvador's leading mobile money transfer platform, Tigo Money, has reviews that are just as bad.

The use of the Lightning Network has exploded, creating a powerful network effect with the infusion of several million new users into the ecosystem. People see the benefits and potential of fast, low-cost transfers and are choosing to use the Lightning Network over the usual centralized transfer methods. This is evidenced by the official data of the stock market.

As we can see, since July (when El Salvador's plans to accept bitcoin were announced), Western Union and MoneyGram began to fall, and continue their downward trend. While bitcoin is growing and gaining strength.

The era of traditional money transfers is coming to an end and this business, if it does not disappear completely, will significantly reduce its influence in the world. Other countries will follow in the wake of El Salvador, and millions of new users will join the ecosystem. What do you think about this?

It's still too early to say that this is the beginning of the end of traditional payment methods. The government of El Salvador is supporting the development of transitioning to digital payment using bitcoin as a legal tender. Hence, a lot of people are also supporting the implemented law by the government by installing the application and other things needed to be able to transact with btc. Aside from these people that use a lightning network, surely there are still people using the traditional payment methods. After all, not everyone is privileged enough to have the resources to attain such digital and contactless transactions. There are still people out there such as the less fortunate ones and the older generations that are still using traditional payment methods. Despite the surge of the rate of those people using digital options in El Salvador, in general, I still believe we are still far ahead from completely transtioning to the digital payment process all in all.

fullhdpixel

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Now this is the real question. I am sick and tired of people talking about how bitcoin or crypto could replace fiat and that's not what it is all about, crypto should not be replacing anything in the fiat world, it wasn't even created for that neither. However payment processors have been living a great life for a long time, without much competition and we should have been using crypto for that purpose to begin with.

Unfortunately the amount we are spending on each transaction is too much for most coins at the top, bitcoin and eth costs so much to spend and you can't have payment processors charging that much. However if we could lower that, and make it under 50 cents, then I am pretty sure it could replace most of the payment processors in the world.

Haunebu

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I don't think traditional payment processors will disappear anytime soon just because BTC has been accepted by a small country and has been bullish in recent times. However, it is a possibility thanks to the negligible BTC fees in recent times.

If the fees stay in the 1 - 8 sat/vB range for a long period, I don't really see the need for LN to be honest. Also, more big countries need to accept and regulate BTC and other popular cryptocurrencies.

SquallLeonhart

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Quote from: davis196 on October 10, 2021, 03:03:20 AM

The fact that 1.6-2 million people started using Bitcoin/Lightning Network in El Salvador doesn't necessarily mean that all those 2 million people will keep using Bitcoin/LN transactions forever.Some of them will quit,others will join later.I assume that many people joined Chivo,because of the incentives provided by the government of El Salvador.Once the incentives are over,many people will just leave Chivo.

I still think that if 1.5-2 million people would be enough for it to be growing big and staying big. Yes, there will be some people leaving, but at the end of the day we are talking about something that is forever and not just for now, even the ones that left may rejoin later on and the number between 1.5-2 million will probably stay.

This is why I believe that we should probably not focus on anything else, just focus on "how much" they use, like instead of number of people, we should be checking the usage and if people are using it a lot then we could make a good profit.

davis196

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The fact that 1.6-2 million people started using Bitcoin/Lightning Network in El Salvador doesn't necessarily mean that all those 2 million people will keep using Bitcoin/LN transactions forever.Some of them will quit,others will join later.I assume that many people joined Chivo,because of the incentives provided by the government of El Salvador.Once the incentives are over,many people will just leave Chivo.
I know that the traditional financial services and banks have low ratings in El Salvador,but as the Chivo network keeps growing,more and more people will also leave low ratings to Chivo.
Many of the low ratings are left by confused people,who got frustrated by a situation that was caused by their fault,but they blame the companies,because that's what people do.
I'm not advocating on the banks in El Salvador,but many people leave negative reviews just because they want to,not because the bank scammed them or something.The same thing can be applied for negative reviews left for the Chivo app.

Argoo

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Quote from: Sterbens on October 08, 2021, 02:37:56 PM

I had a serious question from an economics student in my country, and he was intrigued by the news that El Salvador had adopted Bitcoin.

He said: Would it be enough with the current available supply, if all countries adopted Bitcoin as a legal payment like El Salvador did? if enough what is the reason?

As someone who has limited knowledge, of course, I can't answer it scientifically with strong references. So dealing with this exact topic would be invaluable for me to gain enlightenment from those of you who understand more than what I know.

thanks ...

Considering that each bitcoin has one hundred million satoshis, I think this would be enough for all countries that would use it as a means of payment.
However, there is no need to triumph over the situation with El Salvador yet. Too little time has passed to draw any conclusions. In any case, one should hardly expect the transition of states to payments in bitcoins, they will always have their own digital currency closer.

jaysabi

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Without quoting the whole OP, I think traditional money transfer businesses like Western Union and Moneygram are on the decline, but also they were on the decline prior to bitcoin. They're being disrupted by other centralized payment processors like PayPal, Square, Venmo, etc. The old wire transfer services were prime for disruption because they were expensive compared to alternatives. But other centralized payment processors are fast and cheap and easier to use than bitcoin, so I don't anticipate them being disrupted by bitcoin.

Victorycoin

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Bitcoin and cryptocurrency services as a payment system are good and when the economy suffers, the details of all types of transactions that take place in the bitcoin network through transactions are stored through a huge general ledger called blockchain. This means that the user does not have to store all the details of his transaction separately it also allows cryptocurrencies to allow paypal customers to make payments to those sellers in virtual currency. Such currencies can be transacted through paypal digital wallet service.

verita1

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Bitcoin and cryptocurrencies are of interest to people when inflation absorbs their economies that is a good sign for businesses to start including cryptocurrencies as a means of payments. I could perceive it when I shared with the owner of a business that I bought her construction materials to repair my roof. The owner of the business approached me and asked me to teach her how to use cryptocurrencies. I have not taught her yet because I have had very little time to dedicate to her but I will, but in addition to time I was stopped by the knowledge that the owner of the business is a usurer.

batang_bitcoin

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Quote from: bittraffic on October 09, 2021, 12:36:47 PM

With the adoption not just in El Salvador, those old modes of payment will likely die unless they also adopt BTC like what PayPal had done. Paypal must have seen it coming too just like Visa and Mastercard.

The big remittance processors aren't going to die but they'll have to think of another way of getting back those customers. What they can adopt is the technology and making their service ease and cheaper than the usual transfers. That goes the competition first but if they've done that and there's not that much sales from that action then the last is what you've said, they're going to adopt it but I can't think how they'll add it to their service if using bitcoin alone is the actual payment and processor already that can be done by any individual without going through a third party.

Coin-1

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Quote from: Symmetrick on October 08, 2021, 11:51:17 AM

The era of traditional money transfers is coming to an end and this business, if it does not disappear completely, will significantly reduce its influence in the world. Other countries will follow in the wake of El Salvador, and millions of new users will join the ecosystem. What do you think about this?

I think it's too early to talk about the end of traditional money transfer processors like VISA, Western Union, etc. Bitcoin was born 12 years ago and has definitely had a significant influence upon this economic industry. It is undeniable that over the past years most of the traditional payment systems have made less profit than expected, so they enlisted the aid of national governments and began to compete with cryptocurrencies.

From my understanding, El Salvador's banks provide poor quality services and therefore have low user ratings. Bitcoin has a highly developed infrastructure, so this country decided to use it to its full potential. In any case, they have not given up on fiat money, because it makes more sense to take advantage of the certain payment processor that is suitable for the task at hand.

I assume that cryptocurrencies and traditional payment systems will exist at the same time and will complement each other.

fiulpro

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So when we are taking about the lightning network being used, are we moving towards a way safer network? Which was much needed for Bitcoins to become a good currency, not just an investment.

Plus even if people are actively registering, the amount of people using the network would be less as compared to the actual numbers hands down, so we have to consider this as an experiment perse for the time being, the economy will definitely grow stronger since the price of Bitcoins despite the Impact China had was really stable. Therefore having such a strong currency indirectly is a good idea anytime of the day.

I think we still have to wait to make any kind of conclusion , monitoring the situation is much needed since it's not just the country but all other countries as well looking at El Salvador and making judgements, if it's a good idea to do this or not. So I do think that they really doing an important job here.

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Quote from: hatshepsut93 on October 09, 2021, 11:46:34 AM

Isn't Chivo giving away $30 to anyone who registers? Of course a lot of people in a poor nation would want to claim free money. The article claims that millions of users were added to Lightning Network, while in reality millions of people just installed an app. Not a fact that they will use it in their daily lives. A lot of people will uninstall it once they claim the free $30 or will use it a few times per year. It's completely unrealistic to think that millions of people who a few weeks ago didn't care about Bitcoin are not "Bitcoin users" who conduct their purchases through LN.

Agreed, it seems too early to make any kind of conclusion about what it is happening at El Salvador, there are some good signs obviously but that is it, we know that just as things have been going on in a favorable direction it could as easily change if for example bitcoin crashed and then all of those people uninstall the app out of fear of the volatility of bitcoin, we need to give it more time before some conclusions can be made, probably a year will be enough to see more relevant long term tendencies we could analyze.

Kakmakr

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Western Union and MoneyGram will not go down, simply because one country shifted to another money transfer method.... they are much too dominant in other countries.

What did happen...was the following :

1. People in El Salvador were introduced to an alternative remittance payment option and they saw that it can be a viable alternative.
2. People sending money home from income that they have received from jobs in 1st world countries ..has seen the benefits of using the Lightning Network.

The eye opening experience is the disruption we (Bitcoin users) want to see happen in 3rd world countries. Wink

bittraffic

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With the adoption not just in El Salvador, those old modes of payment will likely die unless they also adopt BTC like what PayPal had done. Paypal must have seen it coming too just like Visa and Mastercard.

Bukele bragged the news on his Twitter about how much Chivo users had spiked since the day he announced making BTC a legal tender in Miami. I thought from the start it was the Stripe app that he is going to introduce to El Salvadorans but it's his new Chivo with a $30 airdrop of BTC. $30 is enough of a reason to make people install an app and technology that they may try learning.

oHnK

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Indeed, if we only look at the graph once we will conclude that. However, as a good analysis, moreover the variables being measured or compared are variables that have very many supporting factors, so it cannot be concluded that it is that simple. It is true that the growth of BTC users has increased and one of the reasons is supported by the El Salvador government's decision, but it is not significant enough to support that the use of WU and MG has decreased due to this policy. As other users have said that if you drag the graph further the reason is much different. Because it is true that if the comparison period is as short as that, the results will be biased.

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