MasterCard becomes an intermediary for banks in the crypto market

MasterCard is trying to establish itself as a reference in the cryptoasset market. Its strategic plan to achieve this goal is now enriched by a major BtoB brick. MasterCard has indeed developed a service for banks to help them offer crypto-trading. This is a way for the payment giant to establish itself as an intermediary in this area, including with other financial players.

FACTS

• MasterCard has just presented its new programme called Crypto Source. The programme is designed to enable financial institutions to deploy crypto asset trading services in a completely secure manner.

• For this purpose, MasterCard has signed a partnership with Paxos, a regulated provider of crypto-currency products and services. The roles of both partners are well defined:

  • Paxos will provide crypto asset trading and custody services on behalf of banks,

  • Mastercard will integrate its technological capabilities into the banks' interfaces.

• Thus, the Crypto Source programme will offer financial institutions services to :

  • buying, holding and selling crypto assets,

  • security and anti-fraud (via Mastercard Crypto Secure software),

  • consulting.

• The MasterCard Crypto Source programme is currently being rolled out as a pilot. It will be officially launched at a later stage, but the payment giant has not yet given a date.

CHALLENGES

• Accompanying to better dominate: The main challenge for MasterCard in rolling out this new programme is to strengthen its status as a pioneer and key player in the crypto market. More than just serving individuals or businesses as the end customers of its offerings, MasterCard is also seeking to establish itself as a partner to financial players in order to cover the entire market.

• A market that is actually growing: Despite the fall in prices, crypto-assets are attracting new users every day. The Mastercard New Payments 2022 Index, for example, indicated that 29% of respondents worldwide now hold crypto-assets.

• A major role of trust: This democratisation could be accelerated by the involvement of trusted players, financial institutions already known by investors. Thus, still according to the Mastercard New Payments 2022 index, 65% of respondents indicate that they would more willingly opt for crypto services provided by their trusted financial institution.

• This role of trusted third party is twofold, as it is also a major one for the financial institutions themselves, who point out that security and regulatory compliance issues represent obstacles to their positioning on the crypto-asset market. MasterCard is now proposing to take care of these aspects for them.

MARKET PERSPECTIVE

• MasterCard is seeking to perpetuate its activities and its status as the undisputed reference in the payment industry by moving away from the card market and turning to a payment solution considered to be of the future: crypto-assets.

• And to democratise this market while offering itself a key role in it, MasterCard is multiplying initiatives via associations, integrations with its payment infrastructure, support for the emergence of MNBC, the deployment of loyalty services based on crypto-currencies or the organisation of the purchase of NFT.