Bitnet CEO Sees Air Travel as a ‘Great Merchant Category for Bitcoin’
Bitnet CEO John McDonnell was recently interviewed on the Epicenter Bitcoin podcast, and he discussed airline ticket sales as one of the key opportunities for Bitcoin over the short term. In the past, McDonnell was a Senior VP at Visa and Head of Business Development at CyberSource, so he knows a thing or two about the trouble areas in online payments. McDonnell talked about the issues with using credit cards for airline tickets at multiple points throughout the interview, and he believes Bitcoin can be helpful in creating a better payment process for airline companies and their consumers.
Where Can Bitcoin Help Today?
At one point during the interview, Epicenter Bitcoin Co-Host Brian Fabian Crain asked John McDonnell about the industries where he believes Bitcoin can be most helpful over the short term. McDonnell was quick to point out that high-risk merchants are probably the ones who could use some assistance from companies like Bitnet and technologies like Bitcoin:
“Some of the areas of early adoption could well be tied to places where credit cards just are not working well today for whatever reason. Our focus is that if it’s legal in the jurisdiction where the business is being conducted, it’s regulated, [and] the merchant [is] capable of complying with those regulations, [then it’s okay].”
Bitcoin is often used for illicit, online transactions, but those are not the only types of payments that come with added friction. There are plenty of completely legal industries that find it difficult to process payments in an efficient manner, and this is where Bitnet hopes to make some progress.
Why Airlines Need Help
As an example of an industry that could use some improvements in the online payments department, McDonnell spoke about the difficulties that airline companies face when accepting credit card payments online:
“Going back to airlines — sorry to pick on airlines. They’re a high-risk merchant. Their so-called MCC — their merchant category code — is high risk because they’re [selling] high-value tickets well in advance of providing the service. That leads to a lot of disputes and a lot of headaches. Under the network rules, the card-acquiring banks are the ones responsible for making whole the card-issuing banks on these chargebacks, disputes, and frauds. So, that’s a great merchant category for Bitcoin. The airlines get their cash upfront. They don’t have to wait for the billing cycle. They don’t have holdback reserves — you know, the banks don’t crimp their cash through the whole thing.”
It appears that McDonnell and the rest of the Bitnet team have been able to convince at least part of the airline industry that Bitcoin may be a useful option. The airline-owned payment network Universal Air Travel Plan (UATP) partnered with the Bitcoin payment processing company earlier this year. CheapAir and Expedia also accept Bitcoin payments, although neither online travel company is working with Bitnet.
Not as Bullish on Bitcoin for Gambling
McDonnell is obviously bullish on the use of Bitcoin for purchasing airline tickets, but he does not seem as excited about the possibility of using Bitcoin for online casino and sportsbook deposits. Although chargebacks are certainly an issue for online gambling providers, McDonnell claims that the real issue with online casinos is money laundering. Having said that, McDonnell also noted that anti-money laundering compliance can also be built on top of Bitcoin. A few online sportsbooks, such as 5dimes, have already started using Bitcoin for deposits.
Bitnet’s unmatched experience in the online payments industry will be a key element of the company’s success going forward. They appear to have a clear gameplan in mind for the proliferation of Bitcoin payments online, and it will be fascinating to see them try to catch-up with the likes of Coinbase and BitPay.