Mastercard is preparing its network to handle the direct processing of cryptocurrency payments later this year.
Mastercard has already dipped its toes in the water, teaming up with Wirex and BitPay last year to create crypto cards that allow people to transact using their cryptocurrencies. The card scheme has also joined forces with LVL, an up-and-coming cryptocurrency exchange.
In all of these cases, the cryptocurrencies themselves still don’t move through the network, but instead are converted to fiat for onward transmission.
"Our change to supporting digital assets directly will allow many more merchants to accept crypto — an ability that’s currently limited by proprietary methods unique to each digital asset," says Raj Dhamodharan, who leads Mastercard's blockchain effforts. "This change will also cut out inefficiencies, letting both consumers and merchants avoid having to convert back and forth between crypto and traditional to make purchases."
He says the company will draw on its portfolio of 89 blockchain patents granted, with a further 285 pending, in building the supporting infrastructure.
The card scheme has yet to determine which currencies will be supported and will determine on a case-by-case basis according to levels of consumer protection and compliance.
Says Dhamodharan: "Doing this work will create a lot more possibilities for shoppers and merchants, allowing them to transact in an entirely new form of payment. This change may open merchants up to new customers who are already flocking to digital assets, and help sellers build loyalty with existing customers who want this additional option. And customers will be able to save, store and send money in new ways.
"We want to help these concepts flourish and reach their potential, while also developing and encouraging the necessary guardrails."
Mastercard's news follows a recent analysts call with Visa CEO Alfred Kelly where he revealed that simlar plans are afoot at the rival processor.