US Industry Chief Says Payments Firms Warming to Bitcoin
Virtual currency Bitcoin’s perceived benefits as a more efficient, less costly alternative to traditional payment options have caused many to view incumbent payment service providers (PSPs) as antiquated competitors, which will be disrupted out of business when the technology matures, according to
The specialist news service, focusing on Bitcoin and other digital currencies, comments that this view is supported by Jason Oxman, chief executive (CEO) of the Electronic Transactions Association (ETA).
In an interview with
, Oxman agrees that Bitcoin’s ‘disruptive potential’ might soon lead to a rise in partnerships between traditional electronic payments providers and Bitcoin startups.
He also suggests that are similarities between Bitcoin and Napster, the controversial file sharing service that shook up the record industry. “They went all the way to the Supreme Court to shut [Napster] down,” adds Oxman. “That is traditionally how incumbents react to innovation.”
However, he believes the payment industry will take a different approach to emerging technologies, citing a recent partnership between Global Payments and BitPay as one that suggests the payment industry is open to innovation. Under the terms, Global Payments has agreed to refer customers interested in Bitcoin to BitPay’s service.
Oxman adds that the ETA adopts a neutral stance, however, on whether Bitcoin is superior to other new means of transacting. “At bottom, our industry is in the business of facilitating electronic transactions, and those electronic transactions are going to take the form of whatever the customer or merchant of choice agrees is going to be the form of their electronic transaction,” he tells
At the same time, the ETA could become a potential ally in the expansion of Bitcoin’s use amongst consumers. With between 8m and 9m merchants in the US alone now accepting electronic payments, Oxman believes that Bitcoin could be expanded greatly through the reach of ETA members.
“No company, no new startup in the Bitcoin world has the infrastructure to reach all those merchants to make the pitches to why they should accept Bitcoin,” he comments.
Based in Washington, DC, the ETA was founded in 1990 and represents more than 500 companies in the merchant-acquiring industry. Members include Amazon, MasterCard and PayPal, with BitPay currently the only Bitcoin industry member.