A recently published bank report by Spanish banking giant Banco Santander is foreseeing a future wherein – if bitcoin is adopted in the mainstream – the fundamental business model of credit and debit card companies could be uprooted. A research report [PDF] was published earlier this week by Santander Investment Securities (SIS), a subsidiary owned by the Spanish banking group. The report and its findings came after an August meeting which saw SIS researchers, local investors and most notably, Mercado Bitcoin – the largest bitcoin brokerage in Latin America. The bank-sanctioned report, titled “To Bitcoin or Not to Bitcoin?” assess what bitcoin could have in store for banks and financial services in Brazil. In it, the impact of a future with wider adoption of the cryptocurrency and its underlying technology, the blockchain, upon various sectors of the financial services ecosystem is predicted. Card issuers and acquirers, card brands, exchanges and Brazilian banks are all taken under the scanner to see the threats or opportunities that bitcoin and blockchain brings. Card Issuers Closest to Bitcoin’s Rising Tide The report does not pull any punches, as researchers suggested: Simply put, we believe a future with bitcoin transactions with their low (or no) costs and fees puts at risk the entire business model of credit and debit card companies. Acquirers such as Cielo (through net MDRs and POS revenue) and issuer banks (through interchange fees) potentially could suffer the most, in our view. The researchers followed up their claim with a list of the disadvantages of a card payment in comparison to a bitcoin payment. They are: Long payout time for merchants; 30 days as opposed to 10 minutes, with a bitcoin transaction. The lack of card contracts, with bitcoin. Card fees and other middlemen costs. Local taxes as opposed to no […]