Mastercard Inc. said Wednesday it would allow merchants to accept some cryptocurrencies on its network later this year, marking the latest embrace of digital coins by a traditional payment player.
“We are here to enable customers, merchants and businesses to move digital value – traditional or crypto – as they please,” said Raj Dhamodharan, Mastercard’s executive vice president of digital assets in a blog post.
MA Mastercard,
already works with some crypto platforms that issue Mastercard cards that allow people to spend their crypto assets, but those schemes prevent the cryptocurrencies from flowing through Mastercard’s network as the crypto partners convert the digital currency into traditional currency and then send them to Mastercard. By moving to directly support some crypto assets, Mastercard will “eliminate inefficiencies, avoiding both consumers and traders having to switch back and forth between crypto and traditional to make purchases,” Dhamodharan said.
Mastercard intends to be selective about which cryptocurrencies it will allow when it embarks on its plan. The company is looking for cryptocurrencies that respect the privacy of consumer information, follow compliance procedures and provide “the stability people need in a vehicle to spend, not invest.”
Traditional financial technology companies are increasingly experimenting with new digital assets. Mastercard, for example, had already revealed that it has been in talks with central banks about the possibility of “central bank digital currencies,” which would serve as alternative ways to pay outside the fiat currency.
Michael Miebach, Mastercard’s Chief Executive, said of the company’s latest earnings call that Mastercard’s emphasis on consumer protection and transparency, as well as on the underwriting network, could be helpful to central banks as they ponder this future of money.
Visa Inc. CEO Al Kelly said of Visa’s V,
According to the most recent earnings, the company also has agreements with platforms and digital wallets that issue Visa cards so that customers can spend their cryptocurrency. “These wallet relationships represent the potential for more than 50 million Visa credentials,” he said.
Kelly also spoke widely about the cryptocurrency outlook on Visa’s platform. “It goes without saying that to the extent that a specific digital currency becomes a recognized medium of exchange, there is no reason why we cannot add it to our network, which currently supports more than 160 currencies,” he said.
PayPal Holdings Inc. PYPL,
began letting US users buy and sell cryptocurrencies such as bitcoin through its platform late last year, and the company plans to enable consumers to use their crypto balances as a funding tool when they shop with PayPal merchants this quarter. Square Inc. SQ,
Chief Executive Jack Dorsey is a strong supporter of bitcoin, and he started letting users of Square’s Cash App buy and sell that cryptocurrency more than three years ago.