On a January 28th earnings call, MasterCard's CEO Michael Miebach, laid out its plans to support direct payment through cryptocurrencies for Q4 2021. Miebach said cryptocurrencies would integrate directly into its network. This means select merchants will be able to accept cryptocurrencies as a form of payment. The company did not say which cryptocurrencies it plans to support.
MasterCard already supports cryptocurrencies through its cryptocard partners Wirex and Uphold. However, the cryptocard does not accept payment directly. Cryptocurrencies are converted to fiat currency before ever reaching the merchant. In other words, cryptocurrencies are not settled on the network.
MasterCard's new initiative will settle cryptocurrency payments on its network. Many companies are jumping into the mix by accepting cryptocurrency payments. Tesla recently announced that it would accept payment in Bitcoin, although there were no details about how or when that integration will occur.
Given the volatility of many cryptocurrencies MasterCard is hinting that it will only work with stable cryptocurrencies, or stablecoins. This could leave out cryptocurrencies such as Ether (of the Ethereum blockchain) and Bitcoin. The company will emphasize on stability, consumer protection, and regulatory compliance.
“Our philosophy on cryptocurrencies is straightforward: It’s about choice. Mastercard isn’t here to recommend you start using cryptocurrencies. But we are here to enable customers, merchants, and businesses to move digital value,” said Mastercard Executive Vice President for Blockchain and Digital Asset Products Raj Dhamodharan, in a blog post on MasterCard's website.
Bitcoin and Ether attract more investors/traders than those looking to use their cryptocurrency as a form of payment. The cryptocurrency payment economy has not yet taken off. Figuring out the volatility problem and getting more merchants involved, along with direct network settlement, will go a long way to supporting a cryptocurrency payment economy. MasterCard and other payment networks such as PayPal and Visa will all be cornerstones of that economy.
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