Could Mastercard be a driving factor for mass crypto adoption?
Mastercard CEO Michael Miebach recently announced the company’s next move in its partnership with Binance, the leading global crypto exchange in terms of daily trading volumes.
According to Miebach’s Linkedin account, Mastercard will enable users to make crypto purchases at over 90 million stores in Argentina which accept Mastercard.
Mieback shared the giant payment’s vision, stating that bringing crypto to daily purchases would, “unlock the full potential of blockchain technology when we make it easier to access + easier to use,” he added, “to make that a reality, we’re working with Binance to let people to use their crypto to make purchases at 90m+ stores that accept Mastercard.”
More Interest in Crypto Adoption
Prior to the move, the two entities had teamed up to roll out a new prepaid card in Argentina earlier this month.
The Binance Card will simplify the crypto conversion process to fiat in real time. The move enables cardholders in the country to sustain 8% cashback under cryptocurrencies at specific merchants.
Binance, the world’s leading exchange, also plans to expand its card product through prolonged collaboration with Mastercard. CEO Changpeng Zhao hinted at the launch of the Argentina card on July 24 and revealed that the card would also be available in other regions.
Argentina is among the countries with the highest inflation rates in the world. This issue has driven people to crypto and the digital asset has played an important role here.
Compared to 4 years ago, the Peso Argentina (ARS) has lost three-quarters of its value against the dollar. During the same period, Bitcoin gained 114% against the Dollar and gained 1.350% against the Peso.
Overall, the current state of high inflation has motivated Argentinians to adopt cryptocurrencies. However, the financial instability in this country also poses many risks for investors.
Mastercard has extensive experience in helping cryptocurrency holders use its network to make payments in lieu of fiat. However, this integration with Binance is considered a big step forward for the payment service provider.
Visa Sees Potential
Visa, like Mastercard, is working on expanding its presence in Latin America. VISA has always competed directly with Mastercard, and the crypto business is no exception.
The payment giant has formed alliances with Crypto.com, Alterbank, Zro Bank, Agrotoken, and Satoshi Tango. In addition, the company collaborated with Tribal Credit to provide card services to small and medium-sized enterprises.
VISA announced the launch of a new Bitcoin (BTC) cashback prepaid card in Brazil in September 2021. The Ripio card was developed in collaboration with Visa by Brazilian crypto trader Ripio.
The prepaid card will store cryptocurrency, which Ripio will only convert into fiat currency when the card is used to make a purchase. This time around, the unique feature that VISA develops is for users of the Ripio card to receive a 5% refund in Bitcoin after their first transaction using the card.
No One Wants to be Left Behind
Not just Mastercard and Visa, but also a multitude of other financial technology businesses such as Cash App and Paypal, amongst others, have steadily implemented blockchain for the purposes of payment and administrative tasks.
These businesses are united in the conviction that digital currencies will one day dominate the payment system.
Transaction fees, which are a headache for customers, are a challenge that both Visa and Mastercard have to deal with.
In most cases, these businesses will tack on a fee of three to four percent of the total value of a transaction; the exact percentage may vary based on the banks with whom they collaborate.
At this stage, cryptocurrency might be considered an investment option that comes with a high level of risk.
However, payment processing businesses are wagering that crypto will one day be utilized as a form of payment for a variety of purchases that people make on a daily basis, and they don’t want to fall behind in technological developments.
Payment companies say that security risks are also a major concern for card payments involving digital currencies. Many people store crypto in wallets on exchanges or in third-party services with a high risk of being hacked.