As cryptocurrency gains popularity, it may come as no surprise that digital currency is trickling down into more aspects of life, including travel. More travelers and businesses are adopting cryptocurrency for travel payments. This technology provides several advantages as digital currency changes the travel experience.
Tourists ride a longtail boat past Wat Arun temple along the Chao Praya river in Bangkok on December … [+]
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How Crypto-Backed Payments Work
Today’s technology allows one to retain self-custody of their digital assets, engage in more secure transactions, and sidestep costly currency conversion fees.
An evolving trend is using crypto-backed payment cards instead of the typical banking system for international transactions. Clients fund purchases and transfers with a supported cryptocurrency instead of converting their home currency to the local currency.
WeFi is a fintech platform at the core of this burgeoning industry. It provides individuals and businesses with spending accounts. Customers can pay with crypto using virtual and physical Visa debit cards with high payment limits.
It’s possible to connect personal digital wallets to retain cold storage or create a WeFi wallet for instant transaction settlements. The platform engine supports multiple crypto tokens. Users can also swap for the in-house native token, WeFi (WFI). The second option can have cheaper fees and earn rewards, ensuring ample liquidity to complete transactions at low costs.
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Using Cryptocurrency For Travel
In crypto-friendly destinations, more travel providers and online booking sites accept cryptocurrency as a payment method. Crypto purchases can include:
- Booking flights, hotel rooms, vacation rentals, and experiences
- Buying travel gift cards
- Earn loyalty rewards
- Paying tour guides and merchants
- Qualify for crypto-only travel deals
Reasons include an increase in tech-savvy travelers preferring alternative currencies, virtual payments for payment flexibility, and minimizing fees. Payments are accepted online or in-person by paying directly with Bitcoin, Ethereum, Ripple, and more.
Plus, travelers may receive transaction discounts and more affordable fares thanks to decentralized platforms that facilitate direct payments, thereby avoiding intermediary platforms that can cause an increase in processing fees.
Additionally, several travel booking sites offer discounts to encourage crypto payments or to increase the use of their native token.
However, cryptocurrency laws differ by country. As a result, payment options vary widely.
Payments Are Efficient And Secure
Due to the extra complexity and fraud risk, cross-border payments are typically pricier than local transactions. On the other hand, blockchain technology has been around for several years and continues to improve efficiency and foster a friendlier business environment in countries prone to fraud.
For example, WeFi co-founder Maksym Sakharov launched the neobank as a natural progression from his experience in the financial technology space. Sakharov incorporates blockchain technology to solve the traditional system’s insufficiencies and outdated practices.
WeFi co-founder Maksym Sakharov
Maksym Sakharov
WeFi also benefits from the knowledge of co-founder Reeve Collins. He is the former co-founder of Tether and helped launch the world’s largest stablecoin, which seamlessly integrates traditional currencies with blockchain technology.
The company utilizes smart contracts to automate the payment process, enabling near-instant transactions that are less susceptible to human error. It also partners with LayerZero to support multiple cryptocurrency tokens and wallet networks, ensuring secure transactions.
The platform processes millions of transactions and can detect fraud worldwide. Additionally, the system can implement zero-knowledge (ZK) policies for optimal privacy or know-your-customer (KYC) protocols to ensure compliance with local regulations.
This technology also makes it easier to transact in hard-to-reach countries that may not have access to traditional transaction clearing systems like SWIFT. Crypto payment platforms may be the first electronic system some places implement. Low costs may also make adoption more inviting.
Nearly any smartphone can accept or initiate crypto-based payments since it is borderless and does not require extensive hardware or infrastructure. Crypto debit cards and wallets can also integrate with many digital wallet platforms to pay vendors or send cryptocurrency.
Lower Conversion Costs
The primary advantage of cryptocurrency payment methods is lower transaction fees, ranging from 0% to 2%. In comparison, traditional credit card fees incurred by merchants range from 1.5% to 6%, which may be passed on to the price.
It’s also possible to avoid these global payment fees:
- Currency conversion (international exchange fees)
- Foreign transaction fee
- Card-specific charges
Avoiding these fees increases spending ability and reduces overall travel costs.
Less fees for travelers and vendors can encourage repeat crypto travelers and others seeking efficiency to use the service more. However, when paying in a local currency is preferable, programs like WeFi offer competitive rates for fiat conversion.
Cryptocurrency For Travel Allows Self-Custody
It’s common practice to self-custody crypto assets in an offline wallet for optimal security, shielding keys from public exposure. The alternative is leaving them on-chain for instant trading or transfer, which is more susceptible to fraud.
Self-custody makes traveling with crypto more realistic. Protecting private keys allows for the safe storage of balances that are not ready for spending. The app’s proprietary WeChain layer technology lets users move assets and make fast transactions.
This service partners with Cosmos, Ledger, and Gemini to enable payments across numerous networks and to pay vendors wherever debit cards are accepted, which maintains more control over one’s finances.
Pendulum Rewards
Liquidity is pivotal for any crypto payment platform to be affordable and transact quickly. WeFi runs its Pendulum rewards program to achieve operating efficiency.
First, users can convert cryptocurrency into WeFi tokens, powered by Tether, to earn swap rewards that reduce processing fees. This practice provides collateral for a non-custodial payment card that can be used worldwide.
Second, WeFi lets node operators generate tokens that users who don’t want to swap existing crypto can use to complete transactions. Operators collect interest in exchange for providing liquidity.
When users and operators are ready to make a purchase, the WeFi engine can convert its proprietary tokens into the appropriate local currency to fund the transaction via bank transfer, card, or digital wallets like Apple Pay and Google Pay.
Keeping a particular balance on-chain while traveling or at home helps provide rewards to defray future transaction costs. The platform is also more likely to grant higher spending limits to users with more network activity.
Final Thoughts On Using Cryptocurrency For Travel
Modernizing payment options for international travel makes it easier and more affordable to explore crypto-friendly countries and support local economies. Using cryptocurrency for travel is another way to find deals without sacrificing financial control.