While information today can be easily transferred over the internet via email or text, global payments have remained in the “fax era,” according to the former president of PayPal.
David Marcus, the former PayPal executive and co-founder of Bitcoin Lightning-focused payment service Lightspark, sayhe believes Bitcoin’s Lightning Network could solve the cumbersome process of sending money across jurisdictions.
“If you were to stop [someone] and wanting to communicate with them you could ask them for an email address and you can email them easily the next minute [and] you could text them,” Marcus told CNBC in a Sept. 11 interview.
However, there’s no universal protocol when it comes to transferring money over the internet, he said:
“If you were to send them money [but] they were not a U.S citizen here using one of the same fintech apps you’re using then you wouldn’t be able to do that. So we’re still in the fax era of global payments.”
Marcus explained that a money transfer to non-U.S. residents in this case would involve obtaining their bank account number and walking to the local bank to pay $50 for an international wire.
“If it's after Friday at 5 pm, tough luck,” Marcus added.
Marcus, who co-founded Lightspark in May 2022 and serves as CEO, said his company is now in a race to solve that using the Bitcoin Lightning network.
The former PayPal president however believes that ultimately, Bitcoin Lightning won't be used so much for everyday purchases, and instead be mainly used for overseas transfers.
“Our view is actually that Bitcoin is not the currency that people will use to buy things,” he said. Instead, Bitcoin will be used to send U.S. dollars to someone who ultimately receives it in the form of a Japanese yen or euro on the other side of the world, the Lightspark boss explained.
Marcus said Bitcoin’s settlement layer combined with Lightning’s real-time payments enables cash finality at a very low cost.