MasterCard Now Allows Clients to Pay via the Blockchain

The last couple of years have brought numerous advancements in the development of blockchain technology. While it’s bound to revolutionize several markets, only a few big companies have started offering blockchain-based services so far. Leading payment processor MasterCard is now joining the race.

So far, reports have indicated that MasterCard is still researching suitable ways of deploying blockchain technology to the masses. Last Friday, the company announced that it’ll be offering blockchain technology to a couple of merchants and banks to serve as a more efficient method of paying for products and services.

Digital currencies are out of the question

What is surprising to many is the fact that this system isn’t based on any digital currency, but rather only works with fiat. In a recent press statement by Justin Pinkham, the senior vice president of MasterCard Labs, he noted: “We are not using a cryptocurrency, and we are not introducing a new cryptocurrency, because that introduces other challenges, regulatory and legal…If you do a payment, then what we can do is move those funds in the way that we do today in fiat currency.”

Following IBM, MasterCard is now the second Fortune 500 company to start offering blockchain payments to its customers. However, it is important to point out that although MasterCard is actively targeting cross-border payments made between businesses, the feature is invitation-based, which means that the mainstream public will still not be able to use blockchain technology for sending payments.

However, by offering this service, the company hopes that it will provide benefits associated with blockchain technology such as security, transparency, and efficiency to its customers. MasterCard’s blockchain alternative could help remove the middleman when sending overseas transactions, as fees won’t pile up from every bank that the funds move through. Rather, funds will go straight from point A to point B. Unfortunately, it seems as though the system won’t provide a speed improvement, as the funds will reportedly move through the same system as before.

Based on everything that has been outlined so far, what do you think about MasterCard offering its blockchain technology as a new way to send funds? Let us know your thoughts in the comment section below.

  • Ryan Oliver

    So how is this beneficial for anyone? At this point they are using Blockchain to send transaction details however the transaction will not actually take place on the Blockchain because it’s Fiat. However the USD is basically a digital currency, wealth is stored in ledgers on computers and numbers are transferred from here to there, then actual money may be sent or given. It would have cost them less to implement a digital currency as those systems are already in place and proved to be working.

    • CatInThePearl

      You can make cross border transactions without having your funds leave Mastercard, thus avoiding fees. This is for bigger businesses who make a lot of international transactions.

  • Justin Grieshop

    The value of good cryptocurrencies is avoiding the ridiculous network fees that banks charge. Is Mastercard going to charge $.05 to send $10,000? If not, I don’t care if it’s on a block chain. It’s not just the speed that’s going to disrupt these glutenous institutions, it’s the fact that the days of robbing vendors of their hard earned money is numbered. Crypto is the future, precisely because it cuts out everything people can’t stand about financial institutions.

  • Pankaj Lala

    “MasterCard is actively targeting cross-border payments made between businesses, the feature is invitation-based..” is the real take away as the offering seems to be permission-ed chain for business doing away the need of central repositories thus speeding up the process