Merchants could soon be paying an extra $502 million annually in payment processing costs according to a recent article by The Wall Street Journal. The reporting predicts that merchants will pass along at least some of those costs to consumers, an unfortunate development in the face of rising inflation.
The WSJ article also mentioned that more small businesses are beginning to offer discounts to shoppers who pay by debit card, cash, or check. Amboss, a bitcoin Lightning Network service provider is working to add bitcoin to that list.
“Business owners are only just beginning to understand the potential for Bitcoin’s Lightning Network, with Lightning reducing fees by 99%,” Amboss co-founder and CEO Jesse Shrader offered in a discussion about their developments.
The Lightning Network is a second layer built on top of bitcoin that facilitates instant and cheap payments. According to Amboss data, the average lightning fee is .003%. This stands in stark contrast to the 1.5% to 3.5% fees credit card companies typically charge, according to data from Bankrate.
Amboss just announced the release of a new product called Hydro. Hydro will automate liquidity on the Lightning Network, making it easier for businesses to set up and manage Lightning payment infrastructure. By eliminating the need for credit, Shrader is confident the fee savings will incentivize greater acceptance of bitcoin as a medium of exchange.
“Lightning helps accelerate the movement of bitcoin to a speed that’s more appropriate for daily use,” Shrader concluded in our interview. Shrader is optimistic that through making Lightning easier, more businesses will be willing to accept those payments as a strategy to cut costs.
Other companies have expressed recent interest in the Lightning Network as well. Coinbase CEO Brian Armstrong posted this week about plans to integrate lightning into their platform.
Prominent bitcoin advocates like Jack Dorsey have been critical of Coinbase’s reluctance to do so, but it seems the pressure has finally paid off. Bitcoin bull and Ark Invest CEO Cathie Wood noted in a recent post that Coinbase’s integration with lighting will give access to 100 million users. A significant development that may help bolster the trajectory of Lighting adoption across the globe.