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.