Credit card companies are a long-standing pillar in the financial services sector. Credit cards were the first cashless payment option made available to the public and now, one of the leading financial services firms in the world has decided that it’s time for credit cards to get involved in blockchain technologies. On Friday, MasterCard announced that it’s opening up access to a blockchain-based business-to-business (B2B) payment service under a new option called the “MasterCard Blockchain API.”
Launched during the Money 20/20 Hackathon in Las Vegas this past weekend after testing and validation had been completed, this service is slated to become available to customers this week. “MasterCard’s blockchain solution provides a new way for consumers, businesses and banks to transact and is key to the company’s strategy to provide payment solutions that meet every need of financial institutions and their end-customers,” the company said in a press statement.
This move comes as a bit of a surprise, as MasterCard previously issued a blanket rejection of Bitcoin. Still, MasterCard’s blockchain service heralds what Ethereum co-founder Vitalik Buterin described to be blockchain’s potential to replace credit cards. Instead of being taken over by blockchain technologies, however, MasterCard decided to embrace the movement.
As a decentralized digital transaction ledger, blockchain offers MasterCard users a more private and secure option for making transactions, one that is both easily scalable and flexible. The new blockchain API builds on MasterCard’s existing payment network, which covers some 22,000 financial institutions, and also expands blockchain’s capability to handle transactions. The move also solves some of the challenges that B2B schemes typically have, which include “speed, transparency, and costs in cross-border payments.”
“By combining MasterCard blockchain technology with our settlement network and associated network rules, we have created a solution that is safe, secure, auditable and easy to scale,” Ken Moore, MasterCard Labs EVP, said in the press release. “When it comes to payments, we want to provide choice and flexibility to our partners where they are able to seamlessly use both our existing and new payment rails based on the needs and requirements of their customers.”
With a financial giant like MasterCard betting on blockchain, previous predictions by experts seem to be coming true. Blockchain is changing the way we do things — particularly financial transactions. Recently, the Bill & Melinda Gates Foundation opened up a payment platform that caters to those without access to traditional financial services. The blockchain revolution, however, is definitely not limited to just the world of finance. Industries like healthcare, aviation, energy, diplomacy, and education are also exploring blockchain solutions to fit their needs. There is even the possibility of a new internet powered by blockchain.
In short, in the age of information, a secure yet easily trackable method of keeping tabs on data is in high demand — especially with recent hacks and security breeches. Blockchain solutions might just be what the world needs.
Disclosure: Several members of the Futurism team, including the editors of this piece, are personal investors in a number of cryptocurrency markets. Their personal investment perspectives have no impact on editorial content.