Mastercard blockchain: Millions. Opening up the API: Priceless

Credit card purveyors aim to improve 'cross-border, B2B payment flows'

Mastercard is opening up its blockchain API to select partner banks and merchants.

For those approved for sign-up, Mastercard boasts that its tech will improve "cross-border, B2B payment flows".

There are tons of blockchains out there, and Mastercard isn't the first enterprise actor to work on a B2B distributed payment system. Its competitor, Visa, is also working on blockchain tech.

On Monday, IBM also announced some folks were processing payments using its blockchain system.

Mastercard announced its blockchain API in 2016. The new announcement potentially extends its reach.

Garrick Hileman, a research fellow at Cambridge University who studies distributed ledger systems, told The Register: "We're seeing major companies rolling out blockchain payments."

He said it's a good sign that business-focused firms have rolled out their own versions because it shows that "they believe there's something here".

He added that the announcement was significant "because it's Mastercard", but noted "some of the details were pretty scant."

He wondered who had signed up, what markets and sectors Mastercard was targeting, what payment types were possible, and whether there was a limit on the number of sign-ups.

A spokesperson for Mastercard told The Register: "Currently we are exploring blockchain in enabling all types of cross-border B2B payment flows – account-based, blockchain-based and card-based payments... The range of use cases here are B2B interbank payments, tracking trade finance obligations along the value chain, exchanging KYC/ALM data between trusted parties, and more."

Other applications would include "provenance and authentication" to track goods as they're made, and sold off. "For example, businesses can use a Mastercard plastic card with a standard payment terminal to record that the asset arrived at a location on the Blockchain."

The spokesperson declined to disclose the number of banks or merchants that have signed up or their names. Regarding limits, they said: "We will be looking at a phased implementation/pilots with banks and financial institutions as cross-border payments have a lot of nuances and regulations that have to be taken into consideration."

"Cynically one could view this as a 'technology hedge' for Mastercard, insuring themselves against the threat of new entrants into the cross-border B2B payments market, such as Ripple," commented Matt Shaw, a consultant at Synechron Business Consulting in London. "But this is much more – it is a real-world implementation of blockchain technology backed by a large, well-established, global payment operator and it will leverage their brand strength and existing customer network to gain trust and adoption.

"It seems they have encoded their exiting IP and 'network rules' as smart contracts, and employed limited data dispersion to ensure transaction details remain private and performant.

"In time, if the platform fulfils its promise and offers Mastercard lower operational costs and risks it could result in the demise of their existing networks." ®

Other stories you might like

  • Investors start betting against Bitcoin with short-trade products
    Some crypto-bros keep the faith in the face of market onslaught

    ProShares, the issuer of exchange-traded funds with around $65 billion under management, has launched the first short Bitcoin exchange-traded product in the US, offering a way for investors to make money from the ongoing cryptocurrency meltdown.

    Dubbed the ProShares Short Bitcoin Strategy, the ETF is set to launch on the New York Stock Exchange under the ticker BITI. Bitcoin declined to $17,601.58 over the weekend, according to Coin Metrics. It has lost 70 percent of its value since last November's highs.

    Speaking to the Financial Times, Nate Geraci, president of wealth management firm The ETF Store, said there would be "a rather robust market" for the short funds.

    Continue reading
  • Coinbase CEO cuts 1,100 jobs, warns of 'crypto winter'
    The buck stops with me, says Armstrong, but I still have a job

    Coinbase has axed 1,100 employees, cutting its workforce by 18 per cent, while the value of digital assets including Bitcoin plummet amid rising inflation rates in the US.

    CEO Brian Armstrong announced on Tuesday he was "making the difficult decision to reduce the size of [the] team ... to stay healthy during this economic downturn." As the largest US cryptocurrency exchange, Coinbase employed about 1,250 employees at the start of 2021, when novel blockchain-based technologies such as NFTs and stablecoins exploded, launching the current Web3 hype to new heights.

    But the glowing promise of getting rich from trading cryptocurrencies or cartoon apes is losing its shine, spelling bad news for Coinbase. Armstrong warned of a "crypto winter" as America looks set to enter a recession.

    Continue reading
  • Singapore promises 'brutal and unrelentingly hard' action on dodgy crypto players
    But welcomes fast cross-border payments in central bank digital currencies

    In the same week that it welcomed the launch of a local center of excellence focused on crypto-inspired central bank digital currencies, Singapore's Monetary Authority (MAS) has warned crypto cowboys they face a rough ride in the island nation.

    The center of excellence (COE) was established by the Mojaloop Foundation – an open source effort to create payment platforms to make digital financial services accessible to those without access to banks. The COE aims to "accelerate financial inclusion in emerging markets" through hackathons, workshops and pilot projects while examining expanded CBDCs payment capabilities."

    Singapore's sovereign wealth fund has invested in Mojaloop, and MAS chief fintech officer Sopnendu Mohanty serves as a board advisor and the authority provides representatives to the Foundation's working group, alongside folks from the Bill & Melinda Gates Foundation, Google, and more.

    Continue reading
  • Crypto market crashes on Celsius freeze, inflation news
    Not a good moment to look at that digi-coin portfolio, fam

    The cryptocurrency world is experiencing what can only be described as a meltdown, with prices plummeting today to lows not seen since the end of 2020.

    The plunge is likely due to several factors including general economic uncertainty as seen in the stock market, inflation, bearish conditions and loss of confidence in crypto-coins, and scared money and bots being spooked by whales selling.

    It definitely did not help that crypto-lending biz Celsius Network put a freeze on withdrawals, swaps, and transfers Sunday night. Soon after Bitcoin tumbled 10 percent, Ethereum lost 19 percent of its value, and fan-favorite Dogecoin shed nearly 15 percent of its value, or about $0.01, since then. 

    Continue reading

Biting the hand that feeds IT © 1998–2022