Yosemite X, a firm which developed a public blockchain based of fiat currencies, has launched a new credit card service with zero transaction fee.

Dubbed Yosemite Card, the new offering bypasses credit card processing fees by connecting merchants and cardholders directly.

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The company said that it is able to offer the service for almost free as it cuts the middlemen who are actually responsible for driving the prices.

It eliminates the need for intermediary services by storing credit transaction records on blockchain rather than in servers of large financial institutions.

Yosemite Card charges half of the interest rates and one-tenth of the transaction fees (0-0.3% transaction fee) when compared to the traditional credit cards.

The company expects the card to yield around 2-3% of annual savings for merchants on the transactional costs.

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A portion of these savings in the transaction costs will be offered to the users in the form rewards points.

Yosemite X founder YT Kim said: “The card payment industry is following an outdated model that is hurting merchants and consumers, and we saw an opportunity to provide a tangible solution to both.

“With the development of technology that can facilitate credit transactions without as many intermediaries, there’s simply no need to insist on using the outdated system. Yosemite Card is a completely new credit card system that directly connects merchants and customers.”

According to The Nilson Report, credit card purchases from Visa and Mastercard totaled $2.77tn in 2018. Visa and Mastercard users were charged an average of 2% for transaction fees, which costed merchants around $55.4bn.

Visa and Mastercard are expected to increase fees in April 2019 which might result in higher product costs from merchants to compensate for the transaction fees.