Master Card Credit Card company
and crypto company Bakkt Holdings company
On Monday, he said they have partnered to enable crypto card payments.
The companies said the partnership will make it easier for banks, fintech companies and merchants to offer and accept crypto payments. Banks and other financial institutions that issue cards through Mastercard will be able to issue cryptocurrency debit or credit cards that allow people to make payments and earn rewards in bitcoin. It can track other crypto assets.
Bakkt shares more than tripled to $30.60. MasterCard shares rose 0.6 percent to $360.86.
Mastercard said in February that it was preparing to support cryptocurrencies on its network. The network said at the time that more people were using cards to buy crypto assets like bitcoin and using crypto cards to access these assets and convert them into fiat currencies for spending.
Mastercard is one of the largest card networks in the United States, providing the infrastructure through which debit and credit card payments are processed. The company is expanding its fintech partnerships and looking for ways to enable payments that go beyond traditional debit and credit cards.
One of the biggest risks for Mastercard and Peer Visa company
is that a new form of payment being cut off from their networks could eventually evolve and gain scale.
Major card networks and crypto fintech companies have recently announced other partnerships. In most of these deals, Visa or Mastercard acts as a network for a specialized crypto card provided by the same financial technology that houses the cardholders’ crypto assets. Bakkt, for example, currently offers its own Visa debit card.
Monday’s announcement is likely to be even more significant: major banks will be able to offer crypto cards partially backed by Bakkt, potentially reaching a much larger number of consumers. Whether this broader offering takes off will depend in large part on the willingness of banks to issue these cards and consumer demand for them.
The cards will give consumers the ability to pay merchants with bitcoin.
Bakkt converts that cryptocurrency into a currency that the merchant will accept before sending the transaction through the Mastercard network. It will happen when the consumer makes the purchase. The company says that the transfer will take place instantly so that the merchant is not affected by the volatility of the cryptocurrency.
Consumer cryptocurrencies will be stored in a wallet with Bakkt.
The partnership will also allow people to earn rewards in the form of cryptocurrency in lieu of airline miles or other types of points. This offer may appeal to people who have not previously dealt with cryptocurrency.
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It appeared in the October 26, 2021, print edition as “Crypto Payment Coming To Credit Cards”.