Binance has enabled debit and credit cards payments on its platform.
Until recently, a registered user on Binance had to buy cryptocurrency on another platform and have it forwarded to his or her Binance wallet before trading. For example, many users had to open an account on a platform like Coinbase in order to use debit or credit cards. After successfully purchasing on an alternative platform, the user had to send it across to Binance to trade with.
The implication of a Binance user paying for cryptocurrency on another platform before sending it to his trading wallet of choice was that transaction-cost increased. On Coinbase, a purchase comes with fees which invariably affected the volume of trade a user could go ahead with.
In a bullish market, the winding transaction cycle may not have mattered much. The same cannot be said of the long-running bear market. Every cent matters when the market fortunes do not appear so rosy. It is, therefore, not surprising that Binance has decided to make such a move.
Losing market share?
The cryptocurrency market might still be in its early days, but the fight for market share is heating up around the globe. Binance recognizes this fact, as it set up an African division to set up shop in Uganda last year.
The figures quoted for the unbanked segment of the global population is still huge with 350 million in sub-Sahara Africa alone. Other parts of the globe make up the rest of the 1.4 billion unbanked. That there is a huge market to explore in the crypto scene is not in doubt. Mobile penetration is impressive in Africa and this is a fulcrum to drive digital payments.
While Binance must be credited for the wise business decision, it needs mentioning that other exchanges with restrictive payment options can play it smart, at this time. The larger segment of crypto buyers and traders would be spoiled for choice if many platforms make it easier for users to carry on daily trades.
What do you think of the latest move by Binance? Did it come too late? Leave your comments below.