Take a fresh look at your lifestyle.

Mastercard will allow merchants to accept crypto payments this year

0


Mastercard plans to give merchants the option to receive payments in cryptocurrency later this year.

According to a source familiar with the matter, the functionality will allow digital currency payments from customers of Mastercard They are settled in crypto at participating merchants, a first for the financial giant. The company has yet to reveal which digital currencies it intends to support or where.

The details shed new light on CEO Michael Miebach's fourth-quarter commitment to integrate digital currency payments “directly into our network” in a move that the new boss, who led his first earnings call on January 28, said that it will provide maximum flexibility to customers and merchants alike.

Previously, Mastercard supported limited cryptocurrency transactions through its cryptocard partners Wirex and Uphold. But those programs only cover payment, not settlement; coins are converted to fiat currency long before reaching the merchant.

The new initiative promises to change that dynamic between store owners and companies that choose to participate. They will be able to conduct their business beyond the confines of the fiat ecosystem, assuming, of course, that their clients have crypto that they are willing to spend.

That's not a safe bet given the buy-and-hold mantra that is prevalent in the world's largest cryptocurrency. The source noted that most buyers of bitcoins (BTC, -3.69%) treat their currencies primarily as investment vehicles, not as payment tools. And the source underlined that there is no guarantee that Mastercard's crypto settlement initiative will be compliant with bitcoin.

Instead, cryptocurrencies will be evaluated under Mastercard's 2019 "Principles for Blockchain Partnerships" framework, the source said. Released in the wake of Libra's departure from Mastercard, the document emphasized stability, consumer protection and regulatory compliance in the investigation of potential partners.

"Many of the 2,600 digital currencies today fail to do this," Mastercard said at the time.

Currently, relatively few merchants accept cryptocurrencies, bitcoins or not. Tesla's stated plans to sell cars for bitcoin remain hypothetical. A pervasive crypto economy is still far from reality.

But Mastercard has been laying the foundation for that future through years of patents in the digital currency space. The company said it owns 89 blockchain patents and is awaiting approval for another 285 around the world.

In the US, those presentations have included: methods of keeping crypto transactions private, on-chain credit card payment verification, instant processing of blockchain payments, and how to handle crypto refunds, among others.

Mastercard first filed for a patent to handle bitcoin payments in 2013, but abandoned that effort in 2015. It began hiring a team of wallet developers and crypto veterans in 2019. The company now hosts a platform through which central banks can test digital currencies.

The payments space is rushing to support blockchain-based currencies at a rate never seen since Bitcoin pioneered the concept of stateless peer-to-peer immutable transactions in 2009. PayPal intends to implement bitcoin payment functionality to end of this year. The CEO of Visa said that the rival company could add crypto payments in the future.



Leave A Reply

Your email address will not be published.