MasterCard Has Switched to Blockchain With New Payment Solution
On Friday, October 20, MasterCard became the second fortune 500 company to introduce blockchain-based transactions to enable business-to-business payments for its enterprise customers.
MasterCard Rolls Out New Blockchain Payment Solution
In an attempt to streamline cross-border payments, the company has created a proprietary blockchain for its business customers as a means of automating back-end operations.
The company announced the blockchain service via a press release, saying it provides a new way for consumers, businesses and banks to transact — part of an overall strategy to improve customer experience.
Additionally, their blockchain API will be part of the Money 20/20 hackathon in Las Vegas next week — a design sprint-like event in which experts collaborate intensively on software projects.
The MasterCard blockchain also attempts to differentiate itself through 4 key aspects – privacy, flexibility, scalability, as well as the reach of the company’s settlement network.
Interestingly, MasterCard blockchain platform doesn’t use a token, either native or established — instead it facilitates transactions through local fiat currencies.
However, the decision to not use a token was a calculated one on the part of MasterCard, justifying the decision by noting that most companies still predominately do business with government-issued money.
Thus, they believe they are helping their clients avoid the cost of having to continually convert cryptocurrency to fiat when exchanging on their blockchain platform.
Blockchain Tech Being Adopted by Industry Giants
MasterCard has followed in the footsteps of IBM in implementing their blockchain payment platform, with IBM making the same decision earlier this week.
However, the two companies’ approaches to their respective blockchains differ — with IBM using an established cryptocurrency to transmit money.
While MasterCard has opted to forgo using a token, IBM on the other hand has essentially contracted out another, established crypto, for their blockchain platform — Lumen.
Furthermore, other industry leaders have also experimented with the idea of easing the hassles currently associated with cross-border payments.
One in particular includes one of MasterCard’s largest competitors, Visa.
It was only last year when Visa announced it had struck up a partnership with Chain Inc to work on a blockchain-based solution for cross-border, business-to-business exchange called Visa B2B Connect.
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Images via MasterCard, Visa