Due to bitcoin's perceived benefits as a more efficient and less costly alternative to traditional payment options, many in the digital currency industry view incumbent payment service providers as antiquated competitors – firms that will be disrupted out of business when the technology matures.
Now, at least one notable payments industry trade association indicates that its members may be recognizing that bitcoin possesses this disruptive potential, and that this may soon lead to a rise in partnerships between traditional electronic payments providers and bitcoin startups.
Notably, Oxman evoked Napster in his comments, comparing bitcoin to the controversial file sharing service that rocked the record industry. Citing it as a cautionary tale that is resonating with the payment industry, he said:
Oxman, however, believes the payment industry will take a different approach to emerging technologies. In particular, he noted the recent partnership between Global Payments and BitPay as one that suggests the payment industry will not turn a blind eye to innovation. Under the terms, Global Payments has agreed to refer customers interested in bitcoin to BitPay's service. He added:
Founded in 1990, the ETA represents more than 500 companies in the merchant-acquiring industry, fighting for its interests in Washington, DC. Notable members including Amazon, MasterCard and PayPal, along with BitPay – the ETA's only bitcoin industry member.
Embracing innovation equally
Throughout the conversation, Oxman sought to frame his sector of the payments industry as one that is willing to work with emerging tech startups, including those in bitcoin space. He noted, however, that his support is likely to extend equally to providers of all forms of electronic transactions.
Oxman suggested the ETA itself does not advocate for bitcoin over other new and novel means of transacting, nor does it have an official position on its advantages or disadvantages when compared to other offerings.
"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 said.
Oxman further argued that this inclusive viewpoint could be beneficial to the bitcoin industry. As the payments industry has been broadly considering innovations in mobile payments for some time, he suggested his members may now be more inclined to embrace bitcoin and its potential through strategic partnerships:
To date, just one bitcoin company has joined the ETA, but according to Oxman, that doesn't mean ETA members haven't been given more exposure to bitcoin.
The Bitcoin Foundation has played a central role in educating the ETA and its members about the benefits of bitcoin, he said. As an example, Oxman recalled a 2013 ETA event at which Bitcoin Foundation general counsel Patrick Murck spoke, lauding it as a strong sign that both bitcoin and the broader electronics transaction industry can find common ground.
Oxman went so far as to frame the ETA as a potential ally in the expansion of bitcoin's use amongst consumers. Given the large number of merchants accepting electronic payments – between eight and nine million in the US alone – he believes 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 said.
Promoting smart regulation
Given his expertise as a liaison to Washington, Oxman also commented on New York's proposed bitcoin regulations, drawing on his experience educating the 20-plus federal agencies that are involved with regulating payments about industry innovations.
The ETA, Oxman noted, spends most of its time ensuring that governments don't stifle innovations in the field of electronic transactions. In the past, this has meant his organisation has needed to pave the way for new and controversial payment options such as those offered by PayPal and prepaid card providers.
Above all, Oxman stressed that he feels it is important for the bitcoin industry to tell its story to regulators, but that he understands the initial reaction of the government. Regulators simply aren't used to payment methods that don't offer certain forms of protections, he said.
When asked for his opinion on the BitLicense proposals, Oxman also struck a balanced tone. He suggested that he sees both sides of the issue, but that he believes New York needs to conduct more research into bitcoin and its underlying technology.
"I'm not surprised to see that interested parties have asked for more time for comments to be filed in New York," Oxman concluded.
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