MasterCard in Panic over Bitcoin: Drowns in the Shallow End of Pool (Op-ed)

A recent video released by MasterCard has people laughing from Boston to Bangladesh.

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MasterCard in Panic over Bitcoin: Drowns in the Shallow End of Pool (Op-ed)

A recent video released by MasterCard has people laughing from Boston to Bangladesh.

The video is such an obvious attempt to mislead the public about the difference between Bitcoin and MasterCard that even the narrator does not seem to believe his own words.

This article will not waste time dissecting each point made by the video. It will be better to address the difference between traditional payment methods such as MasterCard, and newer payment methods such as Bitcoin.

First of all, MasterCard does not issue either debit or credit cards. Visa and MasterCard are simply payment methods, and terms of payment will vary, depending on the policies of the issuing bank. Visa and MasterCard can be issued by many different banks, but this is not true of all cards. American Express, for instance, is a payment method used by Wells Fargo Bank.

The banks pay these companies for using their platform and charge the account holder each time that they use their cards for purchases. The credit card companies charge both the banks and the merchants for their services, and merchants usually increase their prices to cover these fees.

The narrator of the video, Matthew Driver, CEO of MasterCard SE Asia, never mentions any of these fees. Instead, Driver concentrates on pushing the word “trust.” The product that ends up in the market must be “trusted,” he says, implying that cryptocurrencies cannot be trusted.

Driver fails to mention the recent court settlement in California that required Visa and MasterCard to pay a total of US$7.25 billion after they were found to have overcharged more than 7 million American merchants.

A European court also found MasterCard to have overchared retailers and consumers for cross-border charges, using exchange rates to create a smoke screen for their price-fixing schemes. The banks never seem to be victims of these overcharging problems, only merchants and consumers. MasterCard claims to process more than $4 trillion ($4,000,000,000,000) in more than 38 billion transactions each year, and the California court found that at least 6 billion of those transactions involved an overcharge.

MasterCard is a third-party intermediary, acting as a buffer between banks, consumers and merchants—a buffer that is completely unnecessary when using Bitcoin. There are no third-party fees that need to be paid with Bitcoin. There are no possibilities of overcharging by either banks, or credit card companies. Assets are stored in a fully encrypted digital wallet and transferred directly to the merchant. A transfer of tens of millions of dollars would cost thousands of dollars through a bank. The same transfer using Bitcoin would cost pennies.

Driver’s desperately disingenuous video serves as an example of how the banks and credit card companies view Bitcoin as an existential threat. These companies have been overcharging consumers as much as 80% and getting away with these crimes for decades, yet they want us to “trust” them. Driver tells us that a consumer’s desire to remain anonymous must indicate criminal intent, while his company has been hiding behind the banking system for three generations.

Bitcoin was originally developed as a way to free individuals from a system that allows large businesses to combine recourses and prey on the public, slowly bleeding them like leeches in river. The fees charged by banks, credit card companies, payment processors and money transfer services amount to tens of trillions of dollars each year.

Virtual currencies take these huge profits away from MasterCard and allow consumers to keep control of their own finances. Driver seems surprised that anyone would want control over their own money. The argument is that MasterCard and its form of electronic currency is somehow more transparent that Bitcoin’s blockchain. This idea is ludicrous when we look at the above examples of MasterCard overcharging its customers with fees that are not possible with Bitcoin.

This type of video is actually great news for Bitcoin and the cryptocurrency community.  If MasterCard is so desperate that one of their top executives would think that this video would endorse MasterCard, it means that they are struggling for answers and can find no better attack method.

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