While competitors like Mastercard are embroiled in acrimony with Bitcoin and it’s proponents, American Express (AMEX) has a more diplomatic approach to the digital currency. Globally, American Express holds a distant third position in credit card transaction volume behind Mastercard and industry leader Visa. American Express Chief Executive Ken Chenault shows respect to Bitcoin technology and what it may offer to the future of finance. Still, he does view it as more of a direct competitor than a potential ally.
Also read: Mastercard Attacks Bitcoin in Australia
American Express: People want to Defer Payments
“The reality is, we compete with any form of payments” Mr. Chenault said on Thursday at the DealBook conference in Manhattan.”Everyone focuses on the displacement of Bitcoin and the credit card industry. There’s a reason credit cards were invented.” In particular, he said, people want the ability to defer payments.
This does bring up a valid argument that Bitcoin has many niches left to be filled by the free market. It is not hard to imagine Bitcoin credit cards and loan services becoming quite the rage before the end of the decade. Bitcoin has not even begun to mature. This has not stopped market leaders from many industries from climbing aboard Bitcoin as a conduit to the future of money in The Digital Age. All the more reason a company like American Express may want to explore the opportunities available in Bitcoin integration so they can grow their market share. Bitcoin might be a breakthrough technology AMEX needs to go after the leaders. They have little to lose and everything to gain. Their economies of scale and Bitcoin’s global reach beyond traditional banking sectors can be a perfect tag-team for economic growth.
“The protocol of Bitcoin is going to be important,” Mr. Chenault said on Thursday at the DealBook conference in Manhattan.
Mastercard has taken a far less diplomatic approach, writing letters to Australian government officials to undermine the Bitcoin threat. With Bitcoin fees averaging 0.0004 BTC per transaction, major money-changers like Western Union and Mastercard have good reason to be leery of the small but growing Bitcoin ecosystem. Countries like Australia have taken to Bitcoin fairly quickly, and the trend may be forming.
What a major carrier like American Express may want to do is to test out an AMEX Bitcoin card to see if they can corner the market on international Bitcoin credit services. They have acres of infrastructure and licensing in the industry, and can be a pioneer who’s credibility can take Bitcoin acceptance to the next level. All while building their brand with a new user they normally may not have reached. The possibilities are endless, and their position in the market makes it less of a risk and more of the innovative product offensive.
The point is 2014 has been the year of the Bitcoin price drop, but the year of the technology’s endorsement. Many are choosing sides this year, and AMEX is joining this important conversation, which only reinforces the fact that Bitcoin has arrived as a global monetary force to be reckoned with.
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