Visa takes a swipe at Bitcoin

The world’s largest processor of credit card payments has taken a swipe at the insurgent cyptocurrency Bitcoin.

Speaking on a conference call discussing quarterly results, Visa’s chief executive officer Charles Scharf said that current payment networks were a safer option than Bitcoin:

The established network rules we have, the understanding of how things operate, understanding who the participants are, the fact that the business that we do has financial institutions on either side of the transaction.

Scharf added that Bitcoin faced more friction than people thought. The digital currency is regarded by many as a worth-while challenger to payment giants such as Visa and Western Union.

In December, Bank of America Merrill Lynch (BoAML) said Bitcoin could become a major source of e-commerce and could become a serious competitor to traditional money transfer services.

Last year, Kenyan start-up BitPesa, announced it will be going head-to-head with the more established money transfer services by using Bitcoin to cut transaction costs for remittances.

Traditional providers such as Western Union deduct between $10 (£6) to $17 (£10) from a wire transfer of $200 (£122) from the US to Kenya, and the money can take as long as five days to clear.

BitPesa, by contrast is planning to charge three per cent on overseas transfers and claims the money will arrive the same day. A wire transfer of $200 using BitPesa would cost just $6.