Can Credit Cards and Bitcoin Live Happily Together?


The evolution of technology has blurred the line reality and sci-fi over the past few years as remarkable advancements in every field have started to pop up at a blistering pace. The invention of digital transactions played a significant role in transforming the economy into this all-encompassing, ever-buzzing cluster of activity.

Although credit cards and debit cards still remain the undisputed facilitators of instant cash, there is a popular revolution raging in the digital transactions market that has captured the imagination of economists and financially-savvy citizens alike. Bitcoin is the name of the game that promises to streamline our everyday transactions in the smoothest way possible.

Singapore is another capitalist Asian nation that has exhibited a considerable investment in the present and future of bitcoin. Despite the existence of convenient NETS debit card systems, there is a tremendous geographical fragmentation in terms of their availability and they are not internationally accessible. Credit cards on the other hand, can be rather difficult to acquire for many citizens and the 3-5% transaction charges are frowned upon by credit card holders.

This is where bitcoin aims to fill the gap by offering a truly ubiquitous, hassle-free cryptocurrency that can be made independent of financial market manipulation. So today, we will put the “new breed vs old school” stallions of the digital transaction world in a head-to-head showdown and find out whose future looks more promising.

Firstly, let us highlight the core differences in between the transaction process involved while using credit cards and bitcoins.


For any standard credit card transaction, there are 5 entities involved:

-          The buyer

-          The seller

-          Seller’s bank

-          Buyer’s bank

-          Card associations

The entire process of authorization, batching, clearing and funding the charge is rather cumbersome and takes at least 3-7 days to execute, and merchants still have to be paranoid about the possibility of charge-backs on credit purchases. Additionally, merchants also have to put up extra capital for setting up a merchant account along with secure data transmission lines to guarantee a smooth and safe transaction for customers.


For a standard bitcoin transaction, there are merely 3 entities involved in the transaction process:

-          Buyer

-          Seller

-          Miners

As you can see, the process is vastly simpler and faster than credit card transactions with maximum transparency available for both the buyer and seller.

Demystifying the Fictional Credit Card vs Bitcoin War

Although old school economists and new age technophiles love tossing heated arguments in the media against each other in favor of credit cards and bitcoins respectively, the truth is that it is a totally vain endeavor to discredit the utility of these transaction mediums. One has to take a pragmatic stance on this issue because credit cards and bitcoins do not necessarily have to put each other out of business to pave the future economy of the world.

With the majority of Singaporeans living from paycheck to paycheck on a heavy credit-based lifestyle, there is no possibility bitcoins can throw a wrench in this machine. It’s the only way Singaporeans can support their mortgages, car loans, education loans and shopping lifestyle. The Citibank Dividend Card is a great example of a credit card with a host of attractive rebates and special offers that appropriately rewards your consumption habits.

Hence, this extension of credit is something no customer can afford to let go when they live in a country with sky high costs of living.


On the grounds of security, both credit cards and bitcoins have their own fair share of problems. The initiation of a credit card transaction is carried out by a merchant instead of the customer, which means they can possibly use the meta-data to illegally initiate more transactions in the future.

Secondly, merchants must undergo a thorough inspection before they can associate themselves with credit card companies and officially accept payments from customers. Yet, the problem of hacker-related customer information theft is still a stark reality that has only multiplied over the last few years.

Although bitcoin guarantees transaction anonymity when it comes to payment protocol due to the private key system used by it, users have another set of security concerns to bear with.

Due to the lack of regulation and uncertainty of its future in the market, bitcoin has become one of the most volatile currencies in the world. Federal agencies are also tightening the noose on popular bitcoin trading platforms like Silk Road because of the increased trade of illicit products and services. Even the biggest bitcoin exchange platform Mt. Gox was shut down recently, which resulted in a horde of owners losing all their bitcoins.

Bitcoin payment gateways are a lot faster than credit card companies at exchanging this cryptocurrency into fiat currency and depositing it into merchant bank accounts.

Many payment providers in Singapore are offering monthly subscription models to customers with minimal commission rates (1% or less). However, this decentralized model ensures the payment providers do not manipulate the merchants and customers and force them into an uncompetitive duopoly.

What do you think?