Bitcoin named by banks as major threat, MasterCard agrees
A recent report from the British Banking Association has focused on Bitcoin as the main hindrance to valuable payments revenue, with MasterCard claiming cryptocurrency as its new competition.
The British Banking Association has recently published the report “Digital Disruption: UK Banking Report” which focuses on the rise, challenge and opportunity afforded by the digital revolution to banks.
Bitcoin receives a nod under the cryptocurrencies section, which reads that Bitcoin and it’s ilk are fast becoming “ubiquitous challengers to more familiar, established currencies”. The report continues to state that as cryptocurrencies become more popular, the risks for banks are decidedly more pronounced.
While it’s noted that the risks aren’t impending enough to be realised, a call for the acknowledgement of the threat has been made:
Bitcoin users can handle many of their daily payments needs themselves, without the need for interaction with banks, and avoiding the need to incur bank fees. In the same way, value stored in PayPal accounts moves outside of the bank’s payment systems, depriving banks of valuable payments revenue.
Further attention was paid to Bitcoin’s known volatility and it’s perception as being instrumental in illegal activity. An unfortunate comparison has been made to individuals who choose to assume a level of privacy regarding their identity versus users who may wish to use cryptocurrency as “payments for illegitimate reasons”.
MasterCard vs. Everything (and Bitcoin)
MasterCard has come out with its annual SEC report covering the competition it faces from almost every other method of payment known to man, with a special mention going out to Bitcoin again under the cryptocurrency umbrella.
Citing cryptocurrency as one of many adversaries, MasterCard wastes no time in assessing the situation it finds itself in:
Rapid and significant technological changes could occur, resulting in new and innovative payment methods (including cryptocurrencies) and programs that could place us at a competitive disadvantage and that could reduce the use of MasterCard products.
Other competitors listed include digital wallet providers such as PayPal, AliPay and Amazon. Mobile operator services are also mentioned, such as mPesa and handset manufacturers.
Bitcoin debit cards are here
There’s a reason that banks and credit providers feel threatened, and this latest announcement in the Bitcoin world won’t help: Bitwage is partnering with Xapo to create the world’s first international bitcoin payroll debit card.
The team at Bitwage disclosed the partnership over on their blog, adding that with the new debit card, employees and contractors using the Bitwage system can “withdraw and spend United States Dollars, European Euros, and British Pounds directly from the blockchain”.
Those working outside of the US, Europe and UK can be payed out directly in local currencies. The initial launch is in beta, with all signups receiving a free Bitcoin debit card.
Xapo is a service that combines a Bitcoin wallet with the added security of deep storage, including a fully insured vault that’s offered for long term savings. The company recently raised $20 million USD in funding to simplify their security measures for customers.
Xapo Founder and CEO Wences Casares had the following to say after further funding was secured:
Let us keep in mind that it’s important not to be short-sighted when examining bitcoin. Today, bitcoin is used primarily as a store of value. Soon, it will be a payment mechanism. In the near future it will be a unit of account. We are thankful to be a part of the journey and the ecosystem.
With one of the criticisms of Bitcoin being a supposed lack of utility, the announcement of the above debit card partnership could be seen as the quintessential step that brings Bitcoin closer to the everyday consumer, rather than just the enthusiast.