Credit card companies VISA and Mastercard recently announced their plans to support cryptocurrency adoption in their payment services and other institutions later this year. Visa aims to actively help banks integrate cryptocurrencies into their services. Meanwhile, Mastercard disclosed plans to include crypto transactions in their network services.
VISA to help banks support crypto
American credit card company VISA announced its plans to assist banks in integrating cryptocurrency trading in their services through a crypto software program to be released later this year. This will allow customers to withdraw and hold cryptocurrencies in their bank accounts.
Banks that use VISA’s services will utilize an application programming interface (API) to allow cryptocurrency trading and storing. Digital bank First Boulevard is the first bank to test the API which is posed to become available to other banks by the end of the year.
VISA CEO Al Kelly announced the possibility of utilizing cryptocurrencies and blockchain technology in their payments network on the company’s fiscal first-quarter 2021 earnings call last January 30.
‘Our strategy here is to work with wallets and exchanges to enable users to purchase these currencies using their VISA credentials or to cash out onto our VISA credential to make a fiat purchase at any of the 70 million merchants where VISA is accepted globally’, Kelly elaborated.
VISA has taken an active role in integrating cryptocurrency in the mainstream payments industry. The US-based company has also worked with other crypto payment firms such as BlockFi and Circle in releasing crypto credit cards.
Mastercard’s crypto integration
Mastercard Executive Vice President Raj Dhamodharan announced their crypto integration in a blog post titled ‘Why Mastercard is bringing crypto onto its network’ on February 20.
‘We are preparing right now for the future of crypto and payments, announcing that this year Mastercard will start supporting select cryptocurrencies directly on our network’, Dhamodharan said.
The credit card company cited consumer protection, Know-Your-Customer (KYC) protocols, compliance with local regulations, and stability as their main criteria when choosing which coins to support. They intend to focus on being the ‘vehicle for spending, not investment’, thus placing importance on price stability.
Stablecoins that are compliant with local laws and regulations are most likely to be added to Mastercard’s network.
Mastercard teamed up with multicurrency card company Wirex and Bitcoin payment provider BitPay last year to create crypto credit cards that allow users to spend their crypto assets in purchasing goods and services.
In contrast to this, Dhamodharan pointed out that this recent announcement will allow customers to use crypto through their current Mastercard credit cards instead of specialized Wirex credit cards.
Dhamodharan cited customer choice as the grounding principle behind the decision. ‘Mastercard isn’t here to recommend you start using cryptocurrencies. But we are here to enable customers, merchants and businesses to move digital value—traditional or crypto—however they want.’
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