What Does the Visa Crash Mean for Future Crypto?

Last week, Visa experienced a system crash, which left millions of customers around Europe unable to make digital payments. This was obviously a major problem, considering ‘payment processing through Visa’s systems accounts for £1 in £3 of all UK spending.’ The crash occurred on Friday, just as a flood of people were leaving work to begin their weekends. Some citizens missed trains, others were forced to navigate through chaotic traffic, because drivers could not pay tolls. Some ran out of gas. Some made it out only to be met by crowds of people gathering around local ATMs.

One frustrated customer commented, “I’ve only got two cards and they’re both Visa. I tried to buy my tea in M&S and a cafe but they were both rejected. I don’t know what I’m going to do. It’s a long journey home with no food.”

Friday afternoon was one of the worst possible times for a crash, and it left many customers frustrated. Visa’s system is now back to operating at full capacity, and users are apparently satisfied. Nevertheless, the event was undeniably unsettling. It seemed as if BBC downplayed the event when they commented in a headline, “Customers across Europe unable to make some Purchases.” In reality, it was not some purchases, it was all purchases.

Although the frustration may have only been temporary, this event may have had greater significance than it appears.

First, it’s important to be clear. Visa is an effective service that helps millions around the globe, and hopefully it will continue to do so. In regard to cryptocurrencies, this event is important because it showed humanity how much we depend on one central authority for the majority of our transaction services. No single company should control the lion’s share of the market place when it comes to transactional freedom. No central entity should have the ability to shut down an entire transactional ecosystem. Overall, this event may have opened people’s minds to the possible benefits of using multiple digital payment services. This is not to say cryptocurrencies will lead to the extinction of credit cards, but in the future it may be more feasible to possess multiple forms of digital payment.

Some cryptocurrencies are beginning to offer forms of credit cards. The Salt Lending Platform is one cryptocurrency which will offer physical credit cards to its customers. Ironically, Salt’s credit cards “will operate on established payment processor networks.” Nevertheless, there are many cryptocurrency credit card systems being developed. One of the most popular systems is TenX which raised $80 million in 2017 as an ICO.

Although the question of decentralization within crypto credit cards may be questionable, this concept may be an interesting development moving forward. Ultimately, no third party should have the ability to negatively impact the lives of millions of citizens by accidentally disabling their ability to transact. In order for consumers to receive the best services they should have options. Visa and other credit card companies are usually efficient, but cryptocurrency can metaphorically say to the world, “Visa’s great, but if you ever have problems we’re here too.”

Disclaimer: I am not a financial advisor. This is not financial advice. Please do your research independently and make objective decisions. This article is intended to educate readers about Visa’s recent crash. The author does not hold positions in any of the cryptocurrencies mentioned in the article.