In defense of the Bitcoin
by. Henry Meier
I am exaggerating slightly but I have to do something extra to get your attention after getting my post out late this morning.
Yesterday the Federal Reserve released a report detailing payment trends. When one compares how quickly and dramatically the payment system is evolving with how slowly stake holders and regulators are moving to react, it’s obvious that this is yet another area where technology has outpaced the capacity of regulators, legislators, banks and credit unions to respond to changes in the marketplace.
Why should you care? For the same reason, you should care about the potholes that you have to avoid on the way to work, or the dilapidated train tracks on which you may commute. At some point, these cross the line from being inconveniences to impacting your ability to provide the services members expect. Think of it this way: our payment system is basically a cutting edge version of the Pony Express at a time when virtual currencies, for all their defects, demonstrate that there are cost-effective ways to facilitating instantaneous clearing of payments without the intervention of third parties.
Paper checks are headed for an exhibit in the Smithsonian within a couple of decades at the latest. My five-year old didn’t know what a pay phone was when she saw one A couple of months ago and am positive that her daughter will be equally amused that people used to pay for things by promising to pay for them in writing with paper checks and popping these contracts in the mail. The report confirms that more personalized payment person-to-person payments are beginning to make a mark
One of the trends recognized “in The 2013 Federal Reserve Payments Study is the replacement of check writing as a form of noncash payments to customers’ use of alternative bill payment methods. One alternative to check writing was direct payment to the biller through ACH transactions or via general-purpose cards. Another popular alternative, online or mobile bill payments, was estimated to have 2.5 billion transactions in 2012. Online or mobile person-to-person (P2P) transfers, yet another popular alternative offered by depository institutions, totaled 138.0 million transactions in 2012.”
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