Instead of cutting out the middlemen, blockchain may soon empower financial services giants like Visa and MasterCard to do business cheaper and faster.
Visa is reportedly investing heavily in blockchain, the technology that underpins bitcoin and other digital currencies. Late last year, the global payments company started testing its Visa B2B Connect service, which adopts the principles of bitcoin’s underlying technology to enable businesses to quickly process payments around the world.
Transferring money digitally with the speed and security of blockchain is appealing to multinational companies, especially since businesses don’t have many options apart from the costly wire transfers. Bitcoin, however, is still a no-no as employers and suppliers still prefer to be paid in old-fashioned fiat currencies, according to experts.
“Companies don’t want to use bitcoin as unit of value but rather as a way to understand the underlying ledger technology behind it,” Tom Brown, a partner of San Francisco-based Paul Hastings law firm, told the San Francisco Chronicle.
While it may not be a good option—for now—executives at Visa are not looking at the digital currency as a threat “but as a wellspring of technical innovation.”
“We’re constantly learning, constantly evaluating anything that impacts electronic payments,” Visa’s executive VP of technology Rajat Taneja, told the news outlet.
Visa has already partnered with bitcoin payment service provider BitPay for a Visa-branded card that allows BitPay clients to add bitcoin online and spend the balance—automatically converted into U.S. dollars—at stores or withdraw from ATMs.
“You can withdraw up to $3,000 in cash daily from any ATM with the Visa logo,” Corey Glaze, senior sales engineer of BitPay, wrote in a blog post. “And since bitcoin deposits are credited to the BitPay Card’s dollar balance in seconds, there’s no waiting on exchange fund transfers to clear to cash out.”
Current bitcoin price
The price of bitcoin has climbed above $1,210 level during Tuesday morning’s trading.