The Diners Club — then AmEx — spurred widespread acceptance of the credit card. Could a similar model trigger mass adoption of cryptocurrency?
“‘Someday…” said Frank McNamara.
“Restaurants all over New York will honor this card.” A bold statement at the time. Until 1950, no other company had successfully issued a credit card accepted at more than one merchant.
But in a matter of a few years, the Diners Club took the idea of a common courtesy card and turned it into an industry of its own.
Not long after, credit cards became ubiquitous.
The Diners Club card was an innovation. It significantly improved upon previous cards and, as the first multi-purpose charge card, it paved the way to mass adoption.
This unique product managed to gain widespread acceptance, not only among merchants but among consumers as well — here’s how.
The Diners Club assured that “cardholders would spend more than non-cardholders,” rendering the 7% charge on each transaction a relatively small price to pay.
The Diners Club promised convenience to cardholders — just one monthly bill for all your dining expenses! — as much as a status symbol.
The card struck the perfect balance.
And competitors quickly caught wind of its success. It wasn’t long before American Express launched its first credit card in 1958 — eventually leading to its own status symbol, the Black Card.
These days, most consumers prefer smartphones to plastic (one study revealed 75% of consumers with a card and a smartphone had made at least one mobile payment in the past 12 months).
However, thanks to their seamless simplicity and unerring convenience, everyone still uses their credit card to make purchases online.
Now, imagine if you could embed the strengths of the credit card into the infrastructure of the blockchain — could this be the step-change that finally paves the way to mass adoption of cryptocurrency?
Cryptocurrency has been around for a decade. But the concept of a decentralized public currency is still more idea than reality.
In truth, most of the innovation is on the business side.
In February, JP Morgan became the first U.S. bank to successfully test a digital coin representing a fiat currency. JPM Coin uses blockchain technology to enable the instantaneous transfer of payments between institutional accounts.
Yet, while the coin only serves the banking sector, the large-scale transactions it supports are a notable leap. And the fact that banks are open to the solution suggests other industries will soon enter the arena.
Now, it’s the turn of the institutions.
Fidelity Investments has $2.45 trillion of assets under management. The firm recently opened a division that will help institutional investors get involved in cryptocurrency which, if followed by the passing of a Bitcoin ETF, could see an influx of capital that will skyrocket commercial demand for cryptocurrency.
These moves alone give the market legitimacy, but public utility still lacks.
Path To Acceptance
It’s real-world use cases that will drive public adoption. Starbucks is on its way to accepting Bitcoin, the first retail outlet to do so. And so it’s not unrealistic to say that in three-to-five years — Bitcoin payments in shops, hotels, and restaurants could be commonplace.
Samsung seems to agree.
The smartphone manufacturer has recognized the trend in mobile payments and crypto, building a crypto wallet into its new Galaxy S10: the first major smartphone maker to offer such a feature.
In light of Facebook’s ongoing exploration of the market, we could soon have two-billion-plus users freely transacting in cryptocurrency via their smartphones, barely realizing they’re even using crypto — which is a good thing.
As a problem still exists.
One of the greatest barriers to entry into cryptocurrency is ease of use: users still face a host of hurdles when using cryptocurrencies — multiple steps, exchanges, and conversions. While a series of smaller obstacles — like learning how to use a platform and performing identity verification — are a further deterrent.
There’s also the added risk of losing funds through human error, or a hack. And no-one has figured out how to create value for both businesses and consumers in the way that Diners Card, then AmEx, did.
These are precisely the obstacles that ‘Black Card on the Blockchain’ creator Elitium is trying to overcome.
Mass Adoption of Cryptocurrency
Elitium is transforming the world of luxury with a smartphone application that will soon put the luxury lifestyle within reach of anyone, anywhere. Using artificial intelligence, smart contracts, and cryptocurrency — Elitium could change the very meaning of luxury.
However, Elitium’s ambition stretches beyond building the world’s leading luxury lifestyle network.
The mission is to spur the mass adoption of cryptocurrency.
As a first step, Elitium is developing a mechanism known as the Online ATM: a tool to ‘quickly and securely convert fiat currency into EUM, and vice-versa.’
An Online ATM to help both users and partners transact in EUM — without having to overcome the usual obstacles of ID verification and currency conversion.
Its goal is to simplify transactions between any two currencies.
Real-world Use Case
Say, a customer in Japan wants to purchase a watch from an Elitium partner in the USA.
- The customer selects the product and confirms the purchase
- The online ATM converts the customer’s JPY into EUM
- The seller receives EUM that’s immediately converted into USD
- Both sides have experienced a seamless cross-currency transaction
Better still, the Online ATM will enable interaction with the network’s smart contracts, and so any user can benefit from both the security and anonymity of the Elitium platform — without ever realizing they are transacting in crypto.
The benefits don’t end there.
Thanks to a staking mechanism within its ecosystem, Elitium transaction fees will be lower relative to traditional payment providers. And so partners within the network can expect to become the preferred vendor of consumers around the world, increasing their turnover.
The Online ATM offers a hassle-free conversion mechanism that makes it easy and convenient for consumers to access a boundless global luxury ecosystem — providing the value-adding instrument that has been missing from crypto, until now.
The Online ATM could be a pivotal feature for cryptocurrencies. It could lower the barrier to entry into the ecosystem; increasing the potential userbase of not only the Elitium platform in particular — but of cryptocurrencies in general.
It empowers any customer, anywhere, to use the blockchain to create their own luxury lifestyle. And once part of the network, the user can then enjoy the full benefits of a feature-rich, blockchain-enabled mobile payments gateway.
Be it in:
- Swiping your mobile for NFC-compatible payments
- Requesting a gift from your lifestyle concierge
- Securing transactions with proprietary tokenized insurance
Or simply redeeming a rewards balance of EUM-X to treat a loved one.
Elitium is the perfect showcase of how the traditional credit card model can be enhanced by the blockchain. In adding membership, Elitium can include discounts, offers, and tailor-made experiences within a single smartphone app—to significantly improve upon existing offerings.
Once in the public domain, this black-card-esque service could be the innovation that triggers the mass adoption of cryptocurrency.
Cue a luxury lifestyle — for all.
Disclaimer: I am an official ambassador of Elitium and write stories to cover the project’s progress.
Black Card on the Blockchain was originally published in Hacker Noon on Medium, where people are continuing the conversation by highlighting and responding to this story.