As bitcoin and cryptocurrency enthusiasts we are challenging the traditional finance sector, including banks and cross-border payment companies. We are saying that crypto is better and safer, being an open and distributed ledger technology, and is also cheaper to move money around the world. It’s also faster. One of the mainstream leaders in the traditional payment industry is of course Visa. They are the best known transnational company for international payments, accepted in over 200 countries with an annual turnover passing through their systems of around $4.8 trillion in 2018.
Already at the turn of the century, they held the lion’s share of the credit card payment market at 57%, primarily in dollars.
So when Visa start posting job recruiting ads looking for blockchain talent to be their Technical Support Manager at their visa Fintech office in Paulo Alto, crypto lovers start taking notice. After all this is almost like the competition finally coming around and saying that they want to change sides, or make a deal or also get involved in the blockchain industry. They are looking for new staff to run Visa product strategy within a cryptocurrency ecosystem. The ad says job applicants will be required to manage the roadmap for crypto-related opportunities, with functional knowledge of the crypto industry, DLT (distributed ledger technology), retail payment solutions and preferably a knowledge of advanced cryptography.
Anyone looking for a job?
Seriously though, this is a clear sign that major companies in the finance sector are getting curious about and even beginning to dabble in crypto or at least blockchain tech. It was only a matter of time. At this stage the Visa research team wants to develop new products to deliver value to Visa’s fintech initiatives. New technological advancements are happening at such a rapid pace, as usual, and blockchain is leading the way. It’s just early days still and giant finance corporations are a bit slower to move into such new tech, for safety’s sake naturally, but it looks like they are catching up at last, which is a very bullish sign for crypto.
To companies like Visa, crypto based on the blockchain is certainly a secure and traceable way of transferring assets and getting rid of intermediaries.
That being said, Visa is not feeling challenged by crypto, particularly since bitcoin and all the altcoins put together still only have a small fraction of the daily volume traded, compared to Visa payments. That’s in the short to medium term, of course. Long term trends may change in coming years as crypto becomes more widely adopted, so things could change significantly. Visa CEO, Al Kelly, said in an interview last year that he sees bitcoin as more of a commodity and not yet a payment instrument.
Admittedly bitcoin is slower to move, taking minutes compared to seconds with Visa, and bitcoin may still cost too much to move small amounts, but those two criteria are rapidly changing, as Lightning Network comes on board. Besides that, there are other cryptocurrencies like Litecoin or Dash or any number of others that may be even faster and cheaper to transact with, across just as many international borders as Visa, perhaps even more. Kelly is certainly not overtly against bitcoin, and said that he will certainly entertain the idea of adopting it, if it were to become more like a fiat currency in its behaviour.
Another popular cryptocurrency that has actually been adopted by Visa and the global banking sector in general is Ripple. As a result it is not as much approved of by true crypto enthusiasts, since it looks more like a centralised bankers’ coin at this rate. Nevertheless, it shows the crossover that can and is occurring in the industry. Visa themselves acquired a partner of Ripple, called Earthport in late 2018. This is so that Visa can literally integrate Ripple’s protocol into their existing payment network to boost their cross-border transactions. Curiously Earthport, which has been in existence since 1997 – way before crypto and blockchain – had seen a recent slump in price of around 28%.
Nevertheless, Visa bought them for $251 million, four times more per actual share than they were being traded for.
In 2016 Earthport launched a single API (app programming interface) specially designed to connect banks to Ripple’s distributed ledger protocol for processing cross-border payments. This will certainly make it cheaper and more efficient for banks, thanks to blockchain technology. So Visa, with their “B2B Connect” cross-border payment blockchain-based digital ID system supposedly launching now in Q1 of 2019, is certainly favouring our beloved tech, if not our beloved crypto – just yet. They need blockchain so that they can also benefit from the ability to tokenize sensitive business data like bank details and account numbers.
Otherwise, they will get left behind, like a dinosaur or relic of the old era, while our new innovative tech strides boldly forward into the future.