On November 28, a judge in Canada approved the distribution of $15.1 million to the families affected by the tragic bus crash occurred in Tisdale, Canada. But, around 2.9 percent of the payment was used to cover transaction fees, demonstrating the merit of transactions using crypto.
PayPal and other widely utilized payment processors require 2.9 percent of a payment as a base transaction fee. As such, when Justice Neil Gabrielson accepted the recommendation of the advisory committee for the Humboldt Broncos Memorial Fund to pay out $15.1 million to the families affected by the accident, more than $480,000 of the payment was said to be paid as the fee of the transaction.
Importance of Crypto
The fundraising was conducted on GoFundMe, a for-profit crowdfunding platform that allows people to raise money for events or initiatives.
As a centralized platform, GoFundMe relies on payment processors to accept and disburse payments. Processors like Visa and PayPal receive a significant chunk of the payments as fees, reducing the amount of money disbursed to the users on the platform.
Most GoFundMe initiatives include unfortunate and unforeseen events that require families to obtain enough funds to cover medical bills or to cover unexpected costs.
When the transaction fees of all payment processors involved in the process are added up, with PayPal alone charging 2.9 percent, which can get higher for cross-border or international payments, it can rise up to around five to six percent.
Cryptocurrencies like Bitcoin, which run on decentralized protocols, have the ability to process payments at extremely low costs. Last month, Binance, the world’s largest cryptocurrency exchange, processed $600 million with a $7 transaction fee.