In an attempt to help popularise the cryptocurrency, Bitcoin wallet and platform provider Coinbase has removed its merchant fees for the first $1 million in orders.
Bitcoin has been seen as one of the possible means for disrupting the existing stranglehold that traditional banks have on financial transactions. Currently, whenever a business accepts payment via credit card, a base percentage fee is charged by banks for assisting in conducting the transaction. This fee is typically 1 to 5 percent of the order for Australian banks.
Bitcoin, on the other hand, has no fees for accepting coins into an account, but the process of converting a balance back into fiat currency is much more difficult.
However, the latest move by Coinbase has eliminated its merchant fee for the first $1 million. There is still the flat-rate $0.15 fee to take care of automated clearing house fees, but compared to existing banks and even PayPal, it represents much lower overheads for businesses.
The volatile nature of the value of the Bitcoin may leave some businesses wondering whether they wish to keep their money in the cryptocurrency and potentially see gains (or losses), or immediately transfer money into fiat currency at the cost of paying the $0.15 fee on individual transactions.
Coinbase provides for both scenarios, allowing businesses to batch transactions by only cashing out on a minimum Bitcoin balance, or by enabling "instant exchanges" on a per-transaction basis. Either method will not attract its 1 percent merchant fee until orders exceed $1 million.
Coinbase still doesn't have support for banks outside of the US at this point, although it does state that this will be added soon.