Visa's Profit Up as Card Giant Dismisses Any Bitcoin Threat

Visa's Profit Up as Card Giant Dismisses Any Bitcoin ThreatVisa has the largest electronic payments network and its not about to fear the bitcoin ecosystem. Moreover — and potentially troubling for the payment giant — Visa is not keeping a close eye on virtual currency developments.
Visa CEO Charlie Scharf was asked about virtual currencies on a conference call Thursday to discuss first-quarter fiscal earnings. Visa reported a 9 percent jump in profit from a year ago as card spending continues to strengthen.
“There are certainly some interesting things about bitcoin and other things like it, but there are also a great deal of complexities,” Scharf said
Consumers are better off with “established network rules” and an “understanding of how things operate,” he said.
Scharf indicated that Visa is not keeping track of the fast-moving developments in the bitcoin universe, even as businesses globally are increasingly accepting virtual currencies as payments. They are doing so with the assitance of bitcoin payments startups, which help eliminate many of the security concerns around bitcoin transactions.
Virtual currency transactions may prove less costlier to merchants than the “swipe fees” charged by Visa, MasterCard and American Express. Swipe fees have surged over the past decade, triggering various layers of lawsuits and some limited action from banking regulators.
Of course, Visa has more pressing issues: Primarily, the swirling controversy over massive payment card breaches over the past few months, led by the massive hack against Target stores affecting at least 70 millino customers.
Visa’s CEO said the payments industry has to adopt new technology to shield customers from data breaches. But whatever new safeguards are adopted, he conceded, won’t prevent every attack.
Scharf said that Visa will encourage the U.S. payments industry to upgrade to technologies like EMV chips and tokenization. Cards with EMV chips, referred to as  “chip and PIN” or “chip technology,” are generally considered hard to replicate or steal than cards with only magnetic stripes.
Visa and other payments processors are under pressure from consumer advocates and some lawmakers to work with card-issuing banks and other payment facilitators to come up with more cutting-edge solutions, including chip-based credit cards that are common — and less prone to point-of-purchase attacks — in Canada and Europe.

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