Friday, October 20, 2017, Mastercard announced that its blockchain solution will now be available for use. The credit card company opened access to its blockchain API for business-to-business (B2B) transactions. This technology will allow faster, more transparent and cost-effective cross-border transactions.
The Mastercard Blockchain
The Mastercard blockchain which will complement existing Mastercard capabilities will also focus on four major indices; privacy, flexibility, scalability and reach. According to Ken Moore, Executive Vice President of Mastercard Labs: [perfectpullquote align=”full” cite=”” link=”” color=”” class=”” size=””]“By combining Mastercard blockchain technology with our settlement network and associated network rules, we have created a solution that is safe, secure, audit-able and easy to scale. 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.”[/perfectpullquote]
Cross-border Payments
With this announcement, Mastercard joins the likes of JP Morgan and IBM in facilitating cross-border payments using blockchain technology. Unlike IBM which announced that it would convert monies to digital assets – Stellar’s cryptocurrency for now – MasterCard will transact directly in fiat currency. According to Justin Pinkham, a senior vice president at Mastercard Labs, “We are not using a cryptocurrency, and we are not introducing a new cryptocurrency because that introduces other challenges – regulatory, legal challenges. If you do a payment, then what we can do is move those funds in the way that we do today in fiat currency.”
More than money transfer
Mastercard blockchain would not only be used to facilitate payments, it would also provide “proof of provenance” for tracking movement of goods.
Blockchain is the future
Mastercard is taking blockchain technology very seriously. To date, the company has registered over 35 related patents and is part of collaborative efforts to develop the technology. Pinkham said last year that the company believes in the role of blockchain in the future of commerce and that the future needs to be developed in partnership with banks, merchants, and industry participants. Notable among these partnerships is its membership of the Ethereum Enterprise Alliance (EEA) which works to develop the ethereum blockchain to meet the needs of enterprises.
The MasterCard blockchain will launch at The Money 20/20 Hackathon ongoing in Las Vegas.
Mahesh Sashital is cofounder of Smartereum.
He was previously Vice President at J.P. Morgan. He has over 15 years of experience in software engineering at various Fortune 20 companies. He has a Bachelor's in Engineering from the University of Mumbai and an MBA from the University of Texas-Austin.
