Visa might have had a stronger start when it comes to crypto integration, but Mastercard is catching up with a vengeance. According to CNBC, the top payments network is getting ready to integrate crypto in a nearly all-encompassing manner.
Sherri Haymond, Mastercard’s executive vice president of digital partnerships, said some things of interest in a related interview:
We want to offer all of our partners the ability to more easily add crypto services to whatever it is they’re doing. Our partners, be they banks, fintechs or merchants, can offer their customers the ability to buy, sell and hold cryptocurrency through an integration with the Baktt platform.
But perhaps the most important one to highlight is that Mastercard’s clients, including banks, have requested this integration. As it stands now, money being spent on crypto is essentially flowing out of banks, and the credit cards they’re linked to, and into third-party exchanges.
It seems banks are viewing this increasing competition and now want to be able to offer crypto to their clients directly.
It’s obviously going to be a gradual process, as crypto exchanges have already learned the ropes. But the talked-about merger of traditional finance with crypto is definitely coming, and it’s coming faster due to overwhelming interest on the part of customers and, by proxy, those providing payments services.
The only thing we love more than credit cards is rewards
Mastercard is going to let thousands of banks and millions of merchants integrate crypto in their products amid ever-growing demand. Part of this will come in the form of loyalty programs and rewards.
Americans love their credit cards, and they love credit card rewards even more. Now nearly 1 in 6 of us want crypto rewards when we pay with plastic. We’re already seeing some forms of this, from 3.5% cashback on bitcoin purchases from BlockFi to Crypto.com’s program rewarding users of its card with its native token.
Cryptocurrencies, and certainly top ones, have shaped up to rival sovereign fiat currencies. And who can say no to free money? The crypto-related rewards system is only one segment of what Mastercard is trying to accomplish, with an even bigger one being the aforementioned integration. Banks want to eliminate the middleman wherever possible and have clients use crypto asset through their own services. That keeps client money under the same roof, builds brand loyalty and helps with retention.
Mastercard’s Bakkt partnership for custody
This will be facilitated by Mastercard’s partnership with Bakkt, the big-name crypto cousin of the New York Stock Exchange. In line with its stated intent from the get-go, Bakkt will provide top-of-the-line crypto custody services for any financial entity that decides to partner with it.
Bakkt CEO Gavin Michael touched upon the integration of crypto into rewards system and said that the firm and its partners are looking to lower the barriers of entry into the market. And that’s indeed the key takeaway for most. While nearly everyone has heard of crypto by now, many have limited familiarity with it or feel like getting into the space as an investor and user is cumbersome. (Even though getting started with crypto is easy.)
Credit cards are the new express on-ramp to crypto adoption
Credit cards have been around long enough that few find them cumbersome. Many find them convenient. They’re almost as popular as debit cards (28% prefer debit cards vs. 27% who choose credit cards, based on 2020 data).
And with 2.8 billion Mastercards currently in use, one can only imagine what this will do when it comes to extending crypto’s reach in the long-term. Native bank crypto wallets and widespread Mastercards that allow for easy use of digital assets will likely take some time to become ubiquitous.
But when they do, the crypto economy should be ready to serve not just the early-adopting investors but the everyday consumer. Crypto is everywhere these days, and the more people get, the more they want…