By Adedapo Adesanya
One of the key players in the traditional payments industry, MasterCard, has said it will soon begin to accept cryptocurrency payments.
The company, in an announcement on its website, said this will commence later this year, explaining that its decision to embrace the digital currency was purely based on data collected across the global MasterCard network.
The credit-card giant’s announcement comes days after Elon Musk, the founder of Tesla Inc, revealed his firm had purchased $1.5 billion worth of Bitcoin and would soon begin to accept it as a form of payment.
Other players who backed cryptocurrencies include BlackRock Inc and payments companies Square and PayPal.
“Whatever your opinions on cryptocurrencies — from a dyed-in-wool fanatic to utter sceptic — the fact remains that these digital assets are becoming a more important part of the payments world.
“We are seeing this fact play out on the Mastercard network, with people using cards to buy crypto assets, especially during Bitcoin’s recent surge in value. We are also seeing users increasingly take advantage of crypto cards to access these assets and convert them into traditional currencies for spending.
“To be clear, this data is not of any individuals – it’s anonymized and in aggregate – but the trend is unmistakable,” the statement from MasterCard said.
MasterCard already offers customers cards that allow people to transact using their cryptocurrencies, although without going through its network.
Business Post understands that doing this work will create a lot more possibilities for shoppers and merchants, allowing them to transact in an entirely new form of payment.
MasterCard also believes that this change may open merchants up to new customers who are already flocking to digital assets.
Mastercard specified that not all cryptocurrencies will be supported on its network, adding that many of the hundreds of digital assets in circulation still need to tighten their compliance measures.
Many cryptocurrencies have struggled to win the trust of mainstream investors and the general public due to their speculative nature and potential for money laundering.
The company has listed four key items it is looking for in acceptable digital assets onto its network: Consumer protections – privacy and security of consumers’ information; Strict compliance protocols – This includes KYC to snuff out illegal activities;
Assets must follow local laws and regulations in the regions they are used and will need to offer stability as a vehicle for spending and for payments.
This move by MasterCard comes just days after its core competitor, Visa, said it will be supporting digital currencies.
“To the extent, a specific digital currency becomes a recognized means of exchange, there’s no reason why we cannot add it to our network, which already supports over 160 currencies today,” the company noted.
