Bitcoin Is Not a Serious Threat to PayPal, Mastercard or Visa, Analyst Says
Lisa Ellis, a partner at MoffettNathanson research company, believes that bitcoin offers no danger to traditional platforms such as Visa, Mastercard or PayPal, Bloomberg reports.
The bitcoin threat is “worth watching, but is unlikely to occur soon”.
“Why would I ever buy coffee with bitcoin?” said Ellis, in a note to MoffettNathanson clients.
Ellis leads the Payments, Processors, and IT Services business sector of the research company, and she is also described as a “recognized expert on Bitcoin, blockchain and other cryptocurrencies”. While at Sanford C. Bernstein & Co, Ellis was the top rated Institutional Investor analyst.
While she recognizes Bitcoin as a threat to the traditional payment industry, she doesn’t believe Bitcoin can overthrow traditional incumbents like Visa, Mastercard, or PayPal.
“Cryptocurrency systems (e.g., Bitcoin, Ethereum, Ripple) are potentially disruptive to private payment systems. Their core design characteristics –- which are aimed at enabling ‘freedom of money’ — are in direct contrast to the characteristics of most traditional, private payment systems,” noted Ellis.
The more possible scenario for the above mentioned three companies is that cryptocurrencies “commoditize” instead of “disintermediating” companies altogether, adds Ellis. Another scenario mentioned by Ellis includes “…the risk of ceding the cross-border person-to-person and business-to-business payments markets to players such as Ripple and Veem that are leveraging crypto”.
Recently, Newconomy reported on the plans of the baking giant JP Morgan to issue its own cryptocurrency. The initial plans include the issuing of the JPM Coin to be used in bank’s payments business.
Finally, Ellis notes that these three companies shouldn’t see bitcoin only as a threat or a competitor, but also as an opportunity, which is presented by numerous advantages of cryptocurrencies and blockchain technology, such as the new revenue streams.