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Mastercard, the world’s second-largest card network, has announced that soon all banks and merchants that are a part of the Mastercard network will be able to integrate crypto into their products and services.
Here is a look at what this means exactly, and why it matters.
Mastercard is teaming up with Bakkt, who will be facilitating the background infrastructure of the partnership, in order to offer a variety of crypto services to its customers. These services will include:
Earning crypto rewards from your Mastercards and the ability to exchange your current balance of travel points are perhaps the 2 most interesting aspects for points and miles travelers. After all, those who use travel rewards credit cards are accustomed to those points and miles being devalued seemingly year after year, as companies nerf sweet spots in award charts or move towards fully dynamic pricing.
Given that, the ability to exchange rewards that depreciate for crypto assets, many of which have been the best-performing assets over the last 5 to 10 years, will be intriguing to many.
Hot Tip: Currently, there are quite a few credit cards that already allow you to earn crypto rewards. Check out some of our favorites!
This move is, without a doubt, a huge vote of confidence from Mastercard on the impact that crypto can have on our legacy financial institutions. Why is that? Well, for starters, the Mastercard network is massive, with over 20,000 financial institutions globally and over 2.8 million Mastercards (credit and debit) in circulation.
The card network can reduce latency and increase the onboarding of more businesses and customers into the crypto-economy without any additional effort from either.
For example, consider a popular franchise like McDonald’s. The infrastructure being built by Bakkt and Mastercard would allow any franchise to use the same point-of-sale (POS) system they’re currently using to begin accepting crypto payments. From the customer side, you’ll easily be able to use the Mastercard (credit or debit) that you’re already using to pay for your order with crypto.
Additionally, from a rewards perspective, McDonald’s could allow customers to earn crypto rewards instead of its own MyMcDonald’s Rewards points, and customers could choose to exchange their balance of MyMcDonald’s Rewards points for crypto instead of food items.
Now take that example and apply it to every other business worldwide that is plugged into the Mastercard network, and consider the implications that could have on both payments and rewards programs going forward.
This is certainly huge news that could have wide-ranging effects on the worlds of payment technology and loyalty rewards moving forward. The fact that one of the world’s largest payment processors is embracing crypto is one more massive notch in its belt of legitimacy. By making efforts to lower the barrier of entry, Mastercard and Bakkt are positioning themselves to be at the forefront of the future of these industries.
