Mastercard enables Bitcoin payments for its network. Being in early means potentially witnessing exorbitant growth, as the figures at the end of this article show. This is clearly what Mastercard aims for. But there is more to the story.
Mastercard – One Of The Two Big Payment Providers
To properly classify the news, you must understand what Mastercard does to earn its $16B in annual revenue.
Together with Visa the company is one of the world biggest payment service providers. In doing so, both companies act as a network and process payments between purchasers, merchants and banks leveraging credit, debit, and prepaid cards.
Mastercard’s power lies neither in processing payments nor in its credit cards. Rather, its real power is the network of millions of merchants and thousands of banks.
And now imagine this network gaining access to the crypto world all the sudden. This is the truly big news. But is that the only implication?
Bitcoin Eats Finance – Or The Other Way Around?
Relative to banks, Mastercard is young, having been incorporated 42 years ago. But compared to the crypto scene, especially Decentralized Finance (DeFi) and the many fintech startups, Mastercard is almost a dinosaur.
On the one hand, I think Mastercard is very aware of these disruptive potentials. On the other hand, they certainly see the growth potential mentioned above.
Then again, the exciting thing about most crypto projects and especially DeFi is that there are no middlemen needed anymore. Is Mastercard only a middleman?
I think the fintech space is undergoing a brutal transformation. In addition, Mastercard has recently faced innovative competitors such as Square or Paypal, but also the European Payment Initiative.
Mastercard and Bitcoin
To keep up, the company is partnering with crypto firm Bakkt as a first step. The idea is to enable the earning of rewards in bitcoin and other cryptocurrencies, but also the spending of digital assets.
At the same time, the Maestro program in Europe will be phased out in 2023.
Exciting times in the fintech scene, what do you think? Let me know your thoughts here or on Twitter.
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Image Source: Pixabay, Pixabay License