Mastercard, one of the world’s two biggest payment card providers, has revealed plans to enable crypto transactions later this year.
Reportedly, Mastercard intends to provide merchants with the opportunity to receive payments in virtual currency in what can be considered a “big win” for the crypto industry. The feature will enable Mastercard customers to make payments in crypto to participating merchants.
While the financial giant has not disclosed specific digital assets or locations that will be favored in their plans, the planned development reflects on past promises that were made by Mastercard CEO Michael Miebach to “provide maximal flexibility to its users”.
Why the Consideration?
Hitherto, Mastercard seems to have tracked its usage to acknowledge the role of cryptocurrency in financial payment plans.
The organization discovered the marked use of its cards to purchase crypto assets, with significant purchases being observed during the recent surge in Bitcoin prices. Similarly, Mastercard noticed the increase in users choosing to employ crypto cards across their network as people convert them to fiat monies to be spent.
According to an article published on Mastercard Newsroom, incidents of crypto purchases using traditional cards have become trends rather than isolated cases – the organization has seen the future of finance, and it is crypto-led.
Nonetheless, Mastercard has voiced its caution on matters crypto integration, thanks to the various longstanding security shortcomings that have become synonymous with digital transitions.
The huge step will require an intentional process of scrutiny on existing platforms and assets. The organization has pledged its caution when selecting the cryptocurrencies to be considered, which is engendered in the currently-existing legislations surrounding consumer protections and compliance.
Nonetheless, Mastercard claims that their philosophy is pegged in user choices. The company asserts that they are by no means recommending the adoption of cryptocurrencies – instead, the firm is only supporting their users’ interests to transact in digital assets.
By supporting user preferences, Mastercard finds it appropriate to accord merchants, customers, and enterprises to create digital value through both traditional and crypto media. Such an approach will exploit the potential of free markets where shoppers and merchants will be free to choose what they want.
From the sales and marketing perspective, businesses will appeal to a new crop of customers that may be classified as crypto-centric whilst also building loyalty with existing users – the ways of sending, receiving, and storing money will be infinite.
Mastercard may be looking to counter the currently-existing obstacles in their way through strategic crypto collaborations with other firms. Sometime in the year 2020, the financial giant partnered with Wirex to enable users to shop using crypto cards.
The decision to team up with other entities is heavily tied to a set of Mastercard requirements that cryptocurrencies and their handlers must follow.
First, as mentioned already, the protection of consumer information is paramount. The firm expects the reliability and security of crypto assets that would be integrated in the Mastercard network.
Second, a strict compliance to regulatory protocols will be a critical requirement, including the Know Your Customer policies that serve to sieve out illicit financial transactions across payment platforms.
Third, apart from ensuring that the digital assets are accepted within the contexts of various jurisdictions, the coins must appeal to customer needs. Such a condition is based on the assumption that Mastercard users will intentionally seek these cryptocurrencies for their benefit.
Customer acceptance can only be achieved if such digital currencies succeed to offer the much-needed stability to influence user spending and investment.
In conclusion, Mastercard’s decision to support crypto assets will go a long way to boost the possibility of a crypto-enabled financial future for all.