Global payment processors Mastercard and Visa are laying the foundations for crypto support that may drive adoption on a global scale.
Leading global payment companies Mastercard and Visa have been making moves to accelerate the support of cryptocurrency payment processors by opening up new options for users around the world. Both companies made strong statements in support of the use of cryptocurrencies in July by announcing respective projects and collaborations that are driving the adoption of cryptocurrencies.
The positive attitude toward cryptocurrency exchanges and payment platforms from the world’s largest traditional payment processors signals a shift in perception from the traditional financial space. Mastercard has been actively encouraging exchanges and payment service providers to enlist in its recently expanded cryptocurrency card program, becoming partners in just a few weeks as part of its Accelerate program. Meanwhile, Visa outlined its vision of the cryptocurrency space with an overarching theme of positivity toward the market and the role it will play.
The payment service provider noted digital currencies as an exciting avenue to expand existing network-of-networks to support the latest technology powering global commerce. These two global giants are not just offering lip service, either; their payment cards and technology are already powering a number of platforms and service providers within the crypto space. The likes of Coinbase and Binance crypto exchanges use either Visa or Mastercard to power their crypto debit card services. Visa’s public affirmation of its positive stance toward cryptocurrency payment services reflects its drive to remain a leading player in the global payment network. As highlighted in its “outlook on new digital currency payment flows,” the company admits that a growing body of players in the traditional financial sphere has been looking to plug into the crypto space: “It’s a concept that is gaining traction beyond fintechs.”
The company has already established a working relationship with some leading cryptocurrency-based firms in 2020, including Coinbase and Fold. This is in addition to more than 25 cryptocurrency wallets that are connected to Visa’s systems. Visa also has its fintech-focused accelerator program called FastTrack, which allows tech firms including cryptocurrency and blockchain-based companies to access its systems and network.
The company has also been developing its own cryptocurrency projects that include an investment into tech firm Anchorage, which builds security infrastructure for the cryptocurrency ecosystem. Its research team has also been working in the blockchain space for a number of years, culminating in the creation of the white papers for the Zether and FlyClient projects.
Furthermore, Visa has been involved in helping shape regulations and policies toward cryptocurrencies around the world. It has worked with the World Economic Forum to develop recommendations for central banks looking into the use cases of central bank digital currencies. Cointelegraph reached out to Visa for additional insights, but the company declined to provide any further information other than its blog post.
Mastercard has been actively encouraging crypto exchanges and payment service providers to sign up to their Accelerate platform in an effort to expedite the process to become partners by fast-tracking the onboarding of new crypto debit and credit card providers while providing added assistance for market entry and expansion in different countries. Nevertheless, prospective partners need to meet stringent requirements set by Mastercard. This includes high levels of consumer protection and compliance with AML/KYC regulations.
This move to collaborate with the crypto industry comes off the back of the news that Wirex became the first cryptocurrency platform granted a Mastercard principal membership. Part of the functionality allows users the ability to instantly convert cryptocurrencies into conventional fiat currency. An added benefit is a rewards program that gives users 1.5% of purchases made with these cards in Bitcoin. Recently, Binance confirmed that a limited run of its Binance Cards is being shipped to Europe. The move adds real substance to the statements made by Visa and Mastercard, as users are beginning to have access to these card services through some of the biggest players in the cryptocurrency exchange space.
According to Josh Goodbody, the director of European and Latin American growth and institutional business at Binance, traditional banking cards are a “bridge between the crypto and traditional finance,” adding: “Crypto debit cards provide a tangible and frictionless way to spend your crypto, and it provides users with the ability to incorporate crypto into their day-to-day lives.”
Goodbody declined to go into detail about the direct working relationship with Visa but stated that the acquisition of cryptocurrency payment platform Swipe would allow Binance to tap into an established network of regional service providers where the company hopes to bring new users into the cryptocurrency space. Goodbody believes that mainstream financial firms will have a key role to play in this:
“Visa and other networks’ willingness to work with the blockchain industry is a very positive vote of confidence for the further adoption of cryptocurrencies. Not only are traditional technology providers facilitating adoption, they are actively participating in the development of the ecosystem — we see this as an opportunity to further the adoption and accessibility of cryptocurrencies.”
Crypto analyst Mati Greenspan also complimented the move by Mastercard and Visa in the Quantum Economics email newsletter from late July, saying: “As far as fundamentals are concerned, this is about as bullish as it gets for Bitcoin and the gang.”
Netanel Kabala, the chief analytics officer and co-founder of payment platform Simplex, told Cointelegraph that his company has been working alongside Visa and Mastercard for seven years. The relationship has allowed the company to open up cryptocurrency offerings to new users exploring alternative investment methods: “Crypto adoption is growing globally as people seek out alternative investment avenues.” Kabala identified a lag time for new users being introduced into crypto, but the integration of mainstream financial institutions like Mastercard and Visa is a strong signal:
“From an analytics standpoint, we’re seeing many new users enter the crypto world. With every new technology or advancement, it often does take some time before the general public incorporates it into the mainstream. While we definitely believed this mainstream adoption would have come earlier, it seems to be starting now.”
Simplex CEO Nimrod Lehavi believes that there is a more receptive perception to the potential benefits of cryptocurrency, mainly driven by people who want to wrestle back control of their assets and ability to transact independently: “Anything that lowers friction and helps people gain full control of their assets will spread adoption, and crypto-connected debit and credit cards are a key component in that regard.”
Financial industry leaders like Mastercard and Visa vocally supporting and actively working with cryptocurrency and blockchain firms add more credence to the value and utility of these services. Lehavi believes that this will open the door to more users that have not been exposed to digital assets: “The support of major players removes a great deal of the uncertainty people might have regarding cryptocurrencies and will enable them to discover digital assets for what they are.”