Some people says, transactional fees are "Free". That is what makes crypto currency, better than debit and/or credit cards. {Because they charge huge fees}
But if your transaction fee is set to zero, no miner will pick it up, right?
Nope:
But even if your transaction does not fit these conditions it will most likely get accepted within a week. There are miners out there that do not require a fee. When the make a block you TX can be in there and you are fine.
If you increase it, it would also increase the speed, at which, your transaction would be processed.
Up to a certain point yes. The miners still need to find a block. You can pay 17 BTC fees if the next block needs 1 hour to be found your TX will take 1 hour for 1 confirmation.
Now, how does that help the person, from a 3rd world country, paying in his currency, which is much weaker, than say the USD $.
The guy in USA pays e.g. 0,0007631 / 50 cents US and think it is fair, but the guy in the 3rd world country, pays for example in Argentine Peso and pay 4,064 peso.
0.0007 is 45.5 cents, the fee (assuming 1 kb TX and 650USD/BTC) would be 6.5 cents which is a lot in comparisson.
The guy in the US cannot buy a hamburger with his 50 cents, but the guy in Argentina, can buy 2 hamburgers with that, so for him it's expensive to pay 0,0007631
to get his transaction processed.
It would not be a viable option for poor countries to accept it as a payment method.
What am I missing?
What you are missing is that #1 you can still pay cash, #2 if a shop accepts credit cards,
every customer pays the fees. everything you can buy is a little more expensive so some can pay with CC with bitcoin you pay only your own fees. People usually forget fees they dont see and complain about those that they are see. Typical costs are 3-5% + 0.10-0.25 EUR sometimes up to 10%. Lets compare that to your 45.5 cent
USD ~ 33.5 cent
EUR + 3% = 34.505 + 0.10 fixed price = 44,5 cent
EUR.
Even if you pay cash you pay this fee! Everytime you buy something in a shop that accepts CreditCards!