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Table of Contents

Lead Story

Simple ways to better your business

News

Industry Update

Feds place chokehold on banks, processors

Apple changes app rules to include virtual currencies

Square ditches mobile wallet, offers cash advances

Features

Your next third-party partner: Friend or foe?

mPOS shaking things up

ISOMetrics:
Alternative payments gaining momentum

Views

A fresh look at chargeback insurance

Gene Lieb and Laura Kaiser
Business Financial Resources

Education

Street SmartsSM:
Auto-pilot and self reflection

Tom Waters and Ben Abel
Bank Associates Merchant Services

TRO/asset freeze: The FTC's nuclear option

Michael Thurman
Thurman Legal

Is that a terminal or a PIN pad?

Dale S. Laszig
DSL Direct LLC

Top five legal issues in the MCA industry

Andrew T. Hayner
Jaffe, Raitt, Heuer & Weiss P.C

Company Profile

Chargebacks911

New Products

Dynamic POS suite

DynaPro, DynaPro Mini
MagTek Inc.

FI-proven platform for merchants

SmartVista for Retailers
BPC Banking Technologies

Inspiration

Discovery leads to delight

Departments

Readers Speak

Resource Guide

Datebook

A Bigger Thing

The Green Sheet Online Edition

June 23, 2014  •  Issue 14:06:02

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Apple changes app rules to include virtual currencies

Apple Inc. added a new rule to its App Store Review guidelines allowing for mobile wallets that facilitate virtual currency transactions, including bitcoin payments. It is seen as a positive development for the bitcoin marketplace because Apple had previously banned payment-related bitcoin apps from its iTunes App Store.

While virtual currencies are not yet regulated in the United States either federally or at the state level (although virtual currencies have been addressed from federal law enforcement and taxation perspectives), Apple's move to include virtual currency apps seems like an admission of bitcoin's viability as an alternative currency when bitcoin payment facilitators operate in accordance with regulations.

The new operating rule states, "Apps may facilitate transmission of approved virtual currencies provided that they do so in compliance with all state and federal laws for the territories in which the app functions." Reportedly, Apple did previously allow bitcoin-related apps in its app marketplace, but those apps were not enabled to send and receive bitcoin payments, as wallets do.

Irate bitcoiners

Apple's banning of the popular bitcoin-based Blockchain app in February 2014 and the earlier removals of similar apps, such as Coinbase in November 2013 and BitPak in May 2012, angered bitcoin enthusiasts. Apple apparently did not provide adequate explanations for why it pulled the bitcoin apps from its app store.

Apple has been called an app dictatorship for its moves. Blockchain, which was the last bitcoin wallet in the iTunes Store at the time of its removal, charged Apple with engaging in anti-competitive practices and violating anti-trust laws. But the U.S. Department of Justice did not find suitable merit in the case and dismissed it. Following that dismissal, members of the bitcoin community expressed their outrage by publicly destroying iPhones.

Lacking an explanation from Apple, tech bloggers dissected the decision. Either Apple was imposing the bitcoin app ban because the tech giant was building its own person-to-person payments network, which would include virtual currency transactions, and it didn't want competition from bitcoin players on the iOS platform; or Apple was taking a conservative, wait-and-see approach to the murky regulatory framework that has contributed to the volatility of the bitcoin marketplace.

"It appears to simply be a PR move to try and win back the hearts of the ever-growing bitcoin user (traditionally higher-tech) demographic," said Thomas Waters, Certified Payment Professional and Director of Sales at Bank Associates Merchant Services. "This is great news for bitcoin as it adds more authenticity to the technology, as well as puts it back into mainstream media in a positive light."

Bitcoin's anti-fragility

Despite its wildly fluctuating market valuation, restrictions placed on it by foreign governments, security breaches caused by badly designed digital wallet schemes and the implosion of bitcoin exchanges, the virtual currency continues to grow in popularity.

A new term has been attributed to bitcoin: "anti-fragile." Waters defined the term as an object that not only survives but thrives as a result of shocks and stresses to it, and any other disorder surrounding it. "Apple's rejection of the associated apps did nothing more than enrage the user base, slightly limit accessibility and make Apple look bad," he said. "Ultimately, the press and the community reaction was more successful at keeping more people talking about the technology than it was at hindering its availability. … It appears that bitcoin is thriving on its current volatility, and it is becoming increasingly difficult to conceive its demise," he said.

Notice to readers: These are archived articles. Contact names or information may be out of date. We regret any inconvenience.

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