In a major announcement this week, Mastercard and Bakkt have launched a strategic alliance to make it easier for merchants, banks and fintechs in the U.S. to provide a wide range of crypto services and offerings. The solutions suite has been dubbed, Crypto-as-a-Service (CaaS), which allows Mastercard partners the chance to enable their end users to buy, sell and hold digital assets through custodial wallets. Those digital wallets will be powered by the Bakkt platform and will help streamline issuance of branded crypto debit and credit cards.
“Mastercard is committed to offering a wide range of payment solutions that deliver more choice, value and impact every day,”
said Sherri Haymond, executive vice president, Digital Partnerships at Mastercard in its announcement.
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“Together with Bakkt and grounded by our principled approach to innovation, we’ll not only empower our partners to offer a dynamic mix of digital assets options, but also deliver differentiated and relevant consumer experiences.”
This news will likely be a significant catalyst for mass adoption of crypto by both merchants and consumers – even more so than when PayPal announced its addition of a handful of cryptocurrencies to its platform. Consider this graphic that shows increasing use of Mastercard credit cards within the U.S. and the world since 2015.
Mastercard stated that it plans to integrate crypto into its loyalty solutions, which means consumers will be able to earn and spend rewards in cryptocurrencies instead of traditional loyalty points, and seamlessly convert their crypto holdings to pay for purchases.
According to the Bakkt U.S. Consumer Crypto Survey1 of 2,000 U.S. Consumers, nearly half (48%) of respondents reported purchasing crypto in the first six months of 2021, while 32% of those who didn’t are either very or somewhat interested in doing so before the end of year. And, according to the Mastercard New Payments Index, 77% of millennials stated that they are interested in learning more about cryptocurrency, with 75% saying that they would use cryptocurrency if they understood it better.
On The Flipside
- While this crypto solution will drive adoption, it will also drive fees, delays, and intermediaries between cryptocurrencies and consumers.
- The whole point of Satoshi Nakamoto’s white paper in 2009, that conceptualized Bitcoin and blockchain technology, was to remove the need for financial middlemen.
Why You Should Care?
This could mark a watershed moment as one of the most widely used and trusted payment methods in the world has validated crypto, and integrated into its business model.
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