Payment Giants' Trade Group Welcomes First Bitcoin Firm
The trade group representing Visa, MasterCard and PayPal has admitted its first cryptocurrency member, signaling a shift toward partnerships between legacy payment networks and Bitcoin startups.
The Electronic Transactions Association (ETA) has brought BitPay into its fold, marking the first time a virtual currency company has joined the major financial trade group. CEO Jason Oxman indicated the August 6 admission foreshadows a broader wave of partnerships between established payment processors and Bitcoin startups.
The move carries significant weight because of who else sits at the ETA table. The group counts Visa, MasterCard, Amazon and PayPal among its members. Bringing an Atlanta-based crypto payment processor aboard suggests the legacy electronic payments industry is beginning to view digital currencies less as a threat and more as a viable integration opportunity.
Oxman stopped short of endorsing Bitcoin over other payment methods, framing the membership as a reflection of pure market demand. “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,” Oxman said.
Regulatory hurdles remain
While corporate doors are opening, regulatory frameworks in major markets are still taking shape. New York’s Department of Financial Services this week extended the public comment period on its BitLicense proposal by 45 days, pushing the deadline to October 21. The extension followed a joint letter from major exchanges BTC China, Huobi and OkCoin outlining their concerns about the regulatory framework.
Oxman noted the ETA historically spent significant time ensuring government constraints did not stifle emerging payment technologies like PayPal. While he understands regulators' focus on consumer protection, he warned New York against rushing to legislate.
“I do think that it’s important to sound a cautionary note that regulators should not apply reflexive rules just because something is new,” Oxman said. “What they should do instead – hopefully New York will undertake this, but the early signs are cause for concern – they should take a real in-depth look at how bitcoin’s systems operates, how the block chain operates, how bitcoin providers like bitcoin processors take additional steps to protect consumers, to protect merchants.”
