Mastercard is intending to proclaim that any of the countless banks and a considerable number of sellers on its portions association can soon arrange crypto into their services.
What is Mastercard?
Mastercard is a payment processor that has been around for over 20 years. It is the largest payments processor in the world and operates in several currencies and asset classes. It charges a transaction fee and keeps 30% of the money. The company had 2017 sales of over $11.3 billion.
What is Mastercard adding to its services?
Mastercard has just released a new blockchain product called Paybox, which is aimed at enabling businesses to issue and manage digital currency. It is designed to be a product in and of itself, and not something that will replace credit cards.
Paybox works as a digital wallet, and can connect to virtual currency exchanges such as COINBASE and Changelly.
How will it affect the crypto community?
CoinDesk spoke with James Morelli, Mastercard's senior director of innovation products, who confirmed to the publication the plans. He said that a lot of the work that was put into the Mastercard METAMASK crypto wallet for debit cards has helped the company develop the backend so that consumers' crypto wallets can also be added to the normal card-processing applications used by merchants, such as check-out.
What else is changing?
Mastercard is working on a crypto API that will allow financial institutions to build virtual wallets that they can use within their own apps, such as their mobile banking applications, as well as a wallet that can be stored on merchant systems, CNBC has learned.
What does this mean for retailers?
Cryptocurrency is basically a means of exchange that has existed since the 1990s. The catch is that while the technology is secure and efficient, it is extremely volatile. Given that, Mastercard would hope that by integrating crypto into its systems it could offer customers a more stable store of value for their payment cards.
"Our goal is to create new markets by collaborating with the entire ecosystem, starting with financial institutions and technology companies," Anuj Nayar, Mastercard's global head of product and strategy, told CNBC.
"Today's announcement is another step towards the future we are building together and one that will change the way the world moves money.
What does this mean for banks?
First, it means they can broaden the range of digital payment options that they can offer to their customers. Typically, cryptocurrency transactions aren’t processed through Mastercard’s global network, however, it’s an example of a trend among financial technology companies that allow transactions to be processed with the aim of lowering costs.
Blockchain technology allows users to use digital coins as payment for goods and services.
In addition, while credit and debit cards provide authorization services to merchants, it’s the payment processors like Mastercard that charge fees to process the transactions. Cryptocurrency transactions are, in many ways, similar to a person paying with cash.
Conclusion
In my view, one of the largest reasons crypto prices are so low today is due to lack of liquidity. With access to banks, any investment that loses 30 percent of its value overnight is not a viable option. Even in my darkest days of bitcoin investing, I could still get my hands on a $100 bitcoin. However, if I lost 30 percent in a single day, I would have lost it all and I would have no way of finding out what I had at the beginning. I have lost this opportunity with cryptos time and time again.
The banks are going to start offering cryptocurrencies in the near future, and as liquidity is restored to the space, more of my followers will be able to feel safe holding cryptocurrencies.
Check out ways to Earn Free Crypto on my Blog!
http://bit.ly/Ultimate-Crypto-Guide
