Visa CEO Charlie Scharf offered his opinion of bitcoin and other emerging virtual currencies on 30th January in a conference call discussing Visa’s first-quarter fiscal earnings.
“There are certainly some interesting things about bitcoin and other things like it, but there are also a great deal of complexities,” Scharf said
The 48-year-old payment company head went on to state that more traditional payments systems are safer for consumers as they have “established network rules” and an “understanding of how things operate”.
Perhaps most notably, Scharf suggested that Visa is not actively monitoring the bitcoin space.
“We feel quite comfortable with the business we have here,” Scarf said.
Scarf further said Visa and more traditional payments companies better understand who the participants in transactions are, and are in a better position to serve the market as they work with financial institutions on “either side of the transaction”.
Bitcoin’s potential for payments
Operating in more than 200 countries, Visa boasts a network of “tens of millions” of merchant outlets and roughly 2 million ATMs as of 30th December 2013, making it one of the largest global payment providers.
Like bitcoin, the 50-year-old company facilitates that transfer of value and information to consumers. As such, major investors have suggested that Visa is the kind of company that is threatened by the emergence of bitcoin.
Chris Dixon, a partner at Menlo Park, Calif.-based venture capital firm Andreessen Horowitz, wrote a blog post on 31st December where he expressed his dismay at the high fees charged by the traditional payments industry, as well as the “huge headaches” they caused startups, and explained why he feels bitcoin is the solution.
“At some point, I had an ‘aha!’ moment and realized that Bitcoin was best understood as a new software protocol through which you could rebuild the payments industry in ways that are better and cheaper,” Dixon wrote.
Computer science professor at Princeton University Ed Felten expressed a similar sentiment at the New York Department of Financial Services (NYDFS) bitcoin hearings in New York, stating that there is a need for currencies that are “born digital” to modernize payments.
Impact
The comments notably come just one day after members of the bitcoin business community such as Jeremy Allaire, founder and CEO of Circle, and Fred Ehrsam, co-founder of Coinbase, called for regulators to help them seek out more traditional financial partners while noting that such partnerships may be challenging to forge.
“That core innovation that allows for transfer of ownership without the need for a trusted third party, that cuts out middlemen,” Ehrsam said.
Scharf’s statements also position Visa as disinterested in bitcoin at a time when other players are looking to educate themselves on the marketplace.
On 28th January, San Francisco-based banking and financial services company Wells Fargo held a summit in New York on virtual currencies. The development led Allaire to state that relations between banks and bitcoin businesses are currently experiencing a “thawing” process between the two camps.
However, with the comments, Visa, it seems, will not be open to holding a similar event.
Image credit: Håkan Dahlström via Flickr