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Bitcoin is a Real Threat to Visa & Mastercard, Right or Not ...?

Written By Hanny & Melissa on Wednesday, April 10, 2019 | Wednesday, April 10, 2019

Analyst at Moffet Nathanson Lisa Ellis said, investors should not ignore the threat of Bitcoin and other crypto to incumbent payment services such as Visa, Mastercard and Paypal.

Ellis suggested to his clients that the increasing use of crypto could threaten the existence of existing payment services.

For example, Ellis leverage coffee purchases using Bitcoin. Even though it sounded ridiculous, Ellis said that it was very likely to expand in the future.

Buying coffee with Bitcoin might be ridiculous for ordinary investors who don't know crypto, but this concept is very standard among crypto activists.

Even now, the technology continues to be developed massively and seriously. However, Ellis said, the process needs a long time before it can succeed on a global scale.

Bitcoin-supporting billionaire Tim Draper once argued, was the norm everyone would buy coffee using Bitcoin in the next two years.

In addition, Starbucks recently reportedly received capital from a significant number of Bakkt Bitcoin futures platforms. As compensation, later Starbucks customers can buy coffee with Bitcoin using Bakkt software.

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Bakkt itself is supported by Pantera Capital, which also invests in a blockchain-based startup Coins.ph in the Philippines. Last month, Go-Pay acquired Coins.ph and later integrated their payment system.

# Blockchain is embraced.

Other assertions come from the results of the latest research, that more than 50 percent of retailers who use technology point of sales are available to accept Bitcoin as a means of payment.

The combination of ease of use, very low shipping costs, price stability and technological updates such as Lightning Network, increasingly encourages the function of Bitcoin as digital cash in the future.

The growth of Bitcoin in countries with crazy inflation is another factor that should be noted by incumbents, such as in Venezuela. "The core characteristics of the crypto system are contrary to the characteristics of the centralized payment system that exists today. Crypto is the antithesis of traditional payment systems that are known to be expensive and old. " Ellis said at that time

Ellis suggested that traditional payment companies need to embrace blockchain technology closely. If not, current incumbents must surrender more land to crypto players in the payment sector between countries, such as Ripple and Veem which are developed for this kind of payment.

Some banks also start swimming in the blockchain ocean. on Tuesday (5/03), JP Morgan Chase said, JPM Coin prototype trial was successful. The big bank allows the transfer of money between countries and also transfers of assets through the blockchain. But currently it is still limited to JPMorgan Chase corporate clients.

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# Break down the Hegemony

Although threatening the words of Ellis, crypto and blockchain are also opportunities for incumbents. He said that this technology could open a new revenue path, such as the authentication process of tracking goods and services.

One of the biggest threats to a centralized payment system is their own pride. As a result of feeling safe and no alternative to the services they offer, traditional payment services continue to increase transaction costs.

This is what the Visa credit card did, which finally forced Kroger, the big retail network in the United States to stop using credit cards, to try to look at the Bitcoin payment system using the Lighting Network protocol.

The successful implementation of cheap and instant Bitcoin payment solutions, can easily tear down Visa and Mastercard hegemony. Already understand friend ...

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