Mastercard Will Now Let You Pay With Blockchain—But Not Bitcoin
Mastercard is allowing people to send money over a blockchain instead of swiping their credit card. They are opening this service up to certain banks and merchants as an alternative and more efficient way to pay for goods. Mastercard now joins IBM as the first two mainstream companies to implement the use of blockchain payments. “We are not using a cryptocurrency, and we are not introducing a new cryptocurrency, because that introduces other challenges—regulatory, legal challenges,” says Justin Pinkham, a senior vice president at Mastercard Labs, who leads the credit card company’s blockchain initiatives. “If you do a payment, then what we can do is move those funds in the way that we do today in fiat currency.” Pinkham says, “Mastercard has one advantage that the bitcoin blockchain doesn’t have: A settlement network that includes 22,000 banks and financial institutions around the world. IBM has announced 13 banks that it plans to include in its network. After all, companies still predominantly rely on government-issued currency to do business, making it impractical to convert cash into cryptocurrency, or vice versa, for each blockchain payment. Even in the bitcoin system you need a bitcoin exchange that could exchange bitcoin for euro, so it creates some complications.”
Will the fact that Mastercard has moved into this market push VISA to do the same?
Will other companies wait to see if this Blockchain is successful in this space before investing?
Will consumers embrace the use of Blockchain or will it be to difficult to get people comfortable with not having to swipe their card?