Will cryptocurrency help Mastercard to grow?

It could have been the case that Mastercard ignored cryptocurrencies and the fintech revolution in payments, but the opposite is true. As one of the leading payment networks in the world, it has instead forged relationships with startups, and even added new products to its core range.

Now, as cryptocurrencies are showing strength, Mastercard is once again demonstrating its flexibility by supporting cryptocurrencies.

According to Trevor Jennewine, Mastercard’s data reveals “as many as 20% of consumers now own cryptocurrency in certain countries,” and merchants and financial instotutions are taking notice of this. Last year Mastercard expanded its cryptocurrency programme last year, making it easier for partners to issue crypto payment cards.

In the USA, Mastercard has teamed up with Bitpay – a payment processor that allows merchants to accept digital currencies like Bitcoin at checkout – and launched a prepaid crypto card in June 202o. This card allows consumers to make in-store and online purchases anywhere Mastercard is accepted, with funds loaded from their BitPay wallet. Consumers can load their card with BTC (Bitcoin), ETH (Ethereum) and other cryptocurrencies and BitPay converts those funds into fiat currencies, such as USD, EUR and GBP.

BitPay noticed a spike in transaction in July, one month after the launch, and has recently added support for Apple Pay so that customers can use an iPhone to make contactless payments.

In Europe, Mastercard has partnered with London-based fintech Wirex to launch a crypto debit card. This is a slightly different product to the BitPay card. The Wirex product allows consumers to spend up to 18 digital and traditional currencies in real time, meaning the funds are not converted until the moment a purchase is made. Furthermore, the Wirex card also allows consumers to earn 2% cash back (in cryptocurrency) on any in-store or online purchase.

Although the products may be slightly different, the one thing they have in common is this: at some point prior to completing a transaction, the cryptocurrency is converted to a fiat currency. This means that it’s fiat currency, not cryptocurrency, that’s flowing through the Mastercard network. But that is about to change.

Mastercard’s CEO Michael Miebach recently announced plans to add digital currencies directly to the company’s network. This means no more conversion to fiat currency, which should make it easier for consumers and merchants to adopt crypto payments.

This is an important move for crypto enthusiasts, because it removes one of the biggest arguments against cryptocurrency use, i.e. they are difficult to spend. Plus, for Mastercard, it adds another form of payments to its product range, and this could be a major growth driver for the network, especially if cryptocurrencies keep gaining traction.  It also shows forward thinking on the part of Mastercard.

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