The CEO of the Electronic Transactions Association (ETA), which can boast giants such as MasterCard, Paypal and Amazon among its members, believes that, while the technology has yet to fully mature, bitcoin could one day offer advantages for the payments industry.
Jason Oxman told the Wall Street Journal that the industry is undergoing profound change, with the arrival of new mobile payment systems and services that are backed by numerous technological advances in the field.
Oxman indicated that he is enthusiastic about the rise of mobile transactions, biometric authentication and other cutting edge payment technologies, including bitcoin, saying:
“We are in, without question, the single most important period of innovation since the invention of the magnetic strip. It is truly a revolutionary time for payments.”
The 50-year-old magnetic strip, which stores data on credit and debit cards, is on the way out, thanks to newer microchips that allow biometric data to be embedded in new cards. Mobile devices, backed by near-field communication (NFC), Bluetooth LE, digital wallets and other emerging technologies are also vying for a slice of the payments market.
The fact that the payments industry still relies on decades-old technology is often used by its detractors in the bitcoin community who like to portray the industry as a dinosaur.
The situation is not that simple, though. Legacy support for old standards is still vital and upgrading the vast infrastructure used by financial institutions and merchants across the globe is a painstakingly slow process.
On the contrary, Oxman insists the payments industry is embracing innovation. He cited MasterCard and Visa as good examples, as both companies have already made serious commitments to mobile payments.
Potential in bitcoin
On the subject of digital currencies, Oxman was generally positive, conceding that the bitcoin network offers a more efficient backend for processing transactions than the complex, multilayered banking system. He further said that bitcoin companies might one day join the ETA.
However, Oxman did have a few caveats, with fraud and security risks remaining a key concern. While noting that the industry is paying attention to ongoing efforts to enhance security in bitcoin, he concluded that the digital currency still has not developed to the point where ETA members would feel comfortable deploying it as a payments solution.
“ETA’s position on bitcoin and alternative currencies today is that they have a right to exist and they should comply with whatever laws [or] regulations apply to payment companies that offer services akin to […] what they are offering,” he said.
The positive outlook from the ETA is not the first time we’ve heard such statements from industry leaders in the payments space. Realex Payments CEO Colm Lyon recently told CoinDesk that the industry will have to adapt and evolve, thanks to the arrival of bitcoin.
One example of a new, digital payments service endorsed by major banks is Paym, which is available to more than 30 million mobile subscribers in Britain.