There has been an ongoing “war” between Visa, Mastercard, and the cryptocurrency industry. With both major card issuers clamping down on Bitcoin-related debit cards over the past few months, it has become somewhat more difficult to spend cryptocurrency. Mastercard is now blaming the cryptocurrency industry for its reduced Q1 growth.
Mastercard vs. Cryptocurrency
The past year has been interesting for cryptocurrency, especially where credit and debit cards are concerned. Both Visa and Mastercard made it rather clear they would rather steer clear of cryptocurrency-related activities altogether. While not a popular decision, it simply makes a lot of sense for these companies. However, both companies also thrive because of cryptocurrency purchases made using Visa and Mastercard payment cards directly.
Unfortunately, it seems that momentum is also grinding to a halt. Mastercard recently released its Q1 earnings report, which failed to impress a lot of stockholders. With overall revenue lower than expected, the company has to find a reason as to why things are not going according to plan. It now seems Mastercard is blaming the lack of cryptocurrency-related purchases with payment cards for the loss of revenue, which is only to be expected.
It is very interesting to see how Mastercard is genuinely surprised by this most recent development. Granted, the falling prices of Bitcoin and all altcoins have caused fewer people to purchase cryptocurrencies with their payment cards. Additionally, the crackdown by this company on crypto-related activities has made consumers wary.
This doesn’t mean people are no longer buying Bitcoin or altcoins with their credit cards. The overall transaction volume went down a bit in Q1, but it seems to be only a matter of time until things pick up again. With some banks preventing their customers from buying Bitcoin with a payment card, the real issue lies there instead of within the cryptocurrency industry itself.
Among the banks preventing cryptocurrency purchases with payment cards are J.P. Morgan Chase, Bank of America, and Citigroup. All companies cite similar reasons for doing so, yet they are costing the likes of Visa and Mastercard a fair amount of revenue because of these odd decisions. Addressing those banks should be a top priority for the card issuing companies, rather than blaming cryptocurrency users.
Whether or not revenue for Mastercard will pick up in Q2 remains to be seen. With the prices of all cryptocurrencies on the rise again, we may see some positive changes in this regard. At the same time, it is not something the company can count on, and other opportunities will need to be explored accordingly. That is much easier said than done, as the number of opportunities in the financial world remains somewhat limited.