Credit card companies aren’t showing many signs of concern from the potential threat posed by Bitcoin and cryptocurrency to their businesses.
According to Bloomberg, even David Nelms of the less popular Discover, which ranks a distant 4th behind the big 3, has said that there are “a lot more potential threats or opportunities than Bitcoin”.
Collectively, the four collect $61.3 billion in annual revenue. They tout their technology safe, more reliable and easier for consumers.
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It is also argued that total Bitcoin volume pales in comparison: $58 million in the past year and $6.9 million the previous year, versus $3.7 trillion in cash disbursements from credit cards. However, the very same data can be flipped to show that this translates to an explosive 640% increase for Bitcoin, which cannot be said for credit cards. At such a rate, it can only be a matter of a few years before crypto volume surpasses that of credit card transactions.
Still, Dan Schulman, VP for enterprise growth at American Express, has said that “Protection and trust are crucial to us and our card members and merchants. We don’t believe that is offered by crypto-currencies today.” Interestingly, we covered an interesting phone call in a post last month where AMEX contacted one of their corporate clients with some very personal questions about his involvement with Bitcoin. While it is possible that the call was made as part of some spot check necessary for compliance or regulation, just as banks are becoming increasingly uneasy about clients running such activities, it still hinted that credit card companies are looking over their shoulder for competitive reasons.
Visa CEO Charlie Scharf says that while cryptocurrency is touted as “frictionless”, it is more complex than meets the eye: “People talk about things like frictionless and things like that, and when you actually dig through it, it’s really not the case. We feel very comfortable with the business that we have here.”
The talk also indicates that while they are closely monitoring developments in the crypto world, they feel no pressure to join forces or start making accommodations toward cryptocurrency as part of a “if you can’t beat ’em, join ’em” approach. Payment processors like eBay and PayPal, on the other hand, have expressed far less contemptuous attitudes toward Bitcoin. Instead, they have tried to walk the fine line of expressing mild tolerance and even support for cryptocurrency, and have even actively defended their capabilities of supporting it, but have not openly embraced it.