To professional bitcoiners, the digital currency can be utilized as both a currency and an electronic payment system. Although finance experts and technology entrepreneurs in Silicon Valley aren’t very interested in virtual currency, they do see it as a fierce payment technology competitor that can fight Visa, Citigroup and Western Union.
Bitcoin (BTC) developers and enthusiasts say they are establishing a system whereby individuals can move money across the Internet securely and cheaply and cost less than conventional wire transfers – a bitcoin transaction may cost one percent, while a debit or credit card transaction could cost a retailer three percent. This can certainly save merchants a lot of money.
However, bitcoin opponents argue this will be what kills the industry’s momentum. Critics of cryptocurrency make the case that the finance industry will urge the government to pass legislation that would hinder the growth of bitcoin.
Also, those against bitcoin say the volatility could wipe out the potential cost savings for merchants.
Whatever might transpire in the near future, a Visa head recently dismissed bitcoin as competition but did note that the company is monitoring the situation. Instead, the credit card company is more confident in traditional payment networks than in digital currencies.
Speaking on a conference call Thursday, Visa CEO Charlie Scharf responded to a question from an investor regarding bitcoin. He said that it is an interesting occurrence, but it still maintains complexities. Scharf pointed to traditional payment networks because they are safer for consumers than cyrptocurrencies such as bitcoin.
“The established network rules we have, the understanding of how things operate, understanding who the participants are, the fact that the business that we do has financial institutions on either side of the transaction,” said Scharf.
In the meantime, Visa will be “paying attention to it,” but “we feel very comfortable with the business that we have here.”
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