PayPal, Western Union & Others Look To Clinch Bitcoin Market
The Money Transmitters – that is, those with the licenses to transfer value – have garnered quite a bit of attention with their public interest in offering Bitcoin services.
Their sudden interest, of course, comes from the power of a law on their side. Bills across the entirety of North America, for instance, dictate that many new Bitcoin-startups are unable to enter into the market cleanly.
Instead, in that space, some of the world’s biggest corporations not only have interest, but have the licenses needed to be a money transmitter.
eBay is looking into accepting Bitcoin through its PayPal payments network, according to Chief Executive John Donahoe in an interview with the Wall Street Journal. “It’s a new disruptive technology, so, yeah, we’re looking at Bitcoin closely,” Donahoe said. “There may be ways to enable it inside PayPal.” While Wall Street Journal claims, “integration into PayPal’s network would give Bitcoin some much-needed legitimacy,” the truth of the matter is Bitcoin would give PayPal legitimacy as fiat currencies inflated away into a faded memory.
Donahoe predicts that in the next five years, Bitcoin or other virtual currencies, even airline miles, could be converted to cash and used in retail. eBay is attempting to push PayPal use at brick-and-mortar retailers. With an 18% jump since last year, PayPal brought in $1.55 billion in revenue for its parent company.
Also according to WSJ, Western Union and MoneyGram International Inc executives are studying ways in which to allow customers to transfer money around using bitcoins.
“If bitcoin continues to grow and the value is defined more internationally, we may find an opportunity for bitcoin to be used to pay for commerce transactions through a Western Union business solution,” David Thompson, an executive vice president and chief information officer of Western Union, said in an interview this week.
“We’ve been contacted by folks who are doing various things in this space to see if there’s opportunities for us to help enable greater functionality for some of these [bitcoin companies] but we’ve not committed and don’t have any imminent plans to announce anything,” Peter Ohser, senior vice president of U.S. and Canada for MoneyGram, said in an interview.
“It’s something we generally follow but we at this time don’t see a significant impact,” David Nelms, chairman and chief executive of Discover Financial Services (DFS), said in a response to a question about bitcoin at the credit-card company’s annual shareholder meeting on Wednesday. “It’s a fairly niche type of thing. It’s outside the standard banking system, so I guess I would be a little surprised if bitcoins actually had an effect … on us over time.”
If these companies do decide to go the Bitcoin route, there is one thing they have going for them: the laws on the books.
Laws such as the Money Transmission Act in California were put together by a group called The Money Services Round Table. The table is a shady political group that does not wish to reveal it’s identity. However, via the Freedom of Information Act, it is evident that its lobbyists met with the Federal Reserve in 2006 to formalize their vague monopoly. It’s members include:
These companies wish to keep the act of transmitting value under their control. They are joined by some other big players that hold multiple money transmitter licenses: