It was only a mere two short weeks ago when Visa shocked many with their announcement of plans to begin adopting cryptocurrency as a recognized payment method at all Visa merchants.
Murmurs began circulating about the future of Mastercard and uncertainty about the company’s future. However, with institutional FOMO kicking in, Mastercard refuses to be made obsolete by their largest competitor. Thus, the company has acknowledged that they are preparing for a crypto-friendly future. Plans for all Mastercard merchants to begin accepting cryptocurrency as a form of payment by the end of this year are in full swing.
Mastercard is now developing the necessary infrastructure to secure their customers’ assurance about the innovative new-way-to-pay.
Mastercard’s Crypto-Adoption Outline
First, Mastercard will NOT allow all cryptocurrency for purchase through their future custody service. The company has stated they will only provide infrastructure to support securely audited cryptos. One could speculate these are likely to be coins pegged to the dollar or another currency, otherwise known as stablecoins.
Partnerships include BitPay & Wirex, which are already signed and part of their testing. The stated goal by the financial giant is this: to allow Merchants to accept cryptocurrency for payment.
According to a source familiar with the matter, the functionality will see customers digital currency payments settled in cryptocurrency at participating merchants. The company has not yet disclosed which digital currencies it intends to support.
Precursors to Crypto
Mastercard first filed a patent for handling payment in Bitcoin (BTC) in 2013 but abandoned the pursuit of accepting these payments two years later in 2015.
Things went relatively quiet until early 2019 when they began hiring a team of wallet developers and cryptocurrency venture-capitalists. Since then, the company now hosts a platform through which central banks can test digital currencies.
In the past, Mastercard supported limited cryptocurrency transactions through its crypto-card partners Wirex and Uphold. The fundamentally flawed obstacle they hope to overcome is that their affiliated programs will begin to cover payments or settlements and incorporate exchangeable straight across for fiat currency well-before reaching a merchant following payment made this way.
The new initiative promises to upend that dynamic among the store owners and businesses who opt-in. They will be able to conduct their business beyond the bounds of the fiat ecosystem, assuming, of course, their customers have crypto they’re willing to spend.
In a blog post published after this story, Mastercard Executive Vice President for Blockchain and Digital Asset Products Raj Dhamodharan hinted at stablecoins becoming the primary beneficiary of Mastercard’s near-future integration.
Mastercard has been laying the groundwork for the once far-in-to-future integration through years of patents around the digital currency space. The company said it holds 89 blockchain patents and is waiting for approval on an additional 285 worldwide.
The payments space is rushing to support blockchain-based currencies at a pace not seen since Bitcoin pioneered the concept of secure, peer-to-peer transactions in 2009.
With PayPal intending to roll out BTC functionality later this year for payments, Visa’s prediction when the company said their biggest rival is likely to add cryptocurrency in the future has proven to be an accurate one.