Bitcoin and blockchain are set to gain traction gradually; however, they will not pose any threat to the payment giants Visa, MasterCard, WorldPay among others, according to a new report by Credit Suisse.
Shading light over various sectors including payments, capital markets, financial services and media, the report highlights that bitcoin transactions are secure, irreversible and do not contain customers’ sensitive information, which helps protect merchants from fraud or fraudulent chargebacks.
The study further indicates towards 13 barriers that bitcoin faces to become a major force and will pave ways for wider mainstream adoption.
According to the report, transaction confirmation is slow, as transactions with lower fees can take more than 40 minutes on average. Of course once recorded in the blockchain, transactions should not be considered settled until they are six blocks deep – another 60 minutes.
Bitcoin has hidden costs which have not been removed. To truly compete as a payment network, the bitcoin blockchain would likely need to be capable of scale comparable to large payment processers to gain mainstream relevance.
The report indicates that Blockchain technology has capability to disrupt card payment system if it is used as the base to replace the current payment rails.
“Enter blockchain – a low-cost, instant, virtually unhackable, fully automated, end-to-end transaction system built on a private permission-based network.
“Such a system would not only enable banks to eliminate costly overheads, but would provide a lower-cost money transfer product attractive to large multi-national organizations with high frequent cross-border funding and trade finance demands," the report highlighted.