Payment giant Mastercard is set to begin accepting select cryptocurrencies directly on its network starting later this year.
The news comes as digital assets become more and more prominent in the payments space, with people using cards to purchase crypto assets and using crypto cards to convert them into traditional currencies.
Mastercard executive vice president for digital assets Raj Dhamodharan said in a recent blog post: “Mastercard isn’t here to recommend you start using cryptocurrencies. But we are here to enable customers, merchants and businesses to move digital value – traditional or crypto – however they want.”
He added that cryptocurrencies that respect the privacy of consumer data, follow compliance procedures and ‘offer the stability people need in a vehicle for spending, not investment’ will only be accepted on its network.
However, the company doesn’t support cryptocurrencies on its platform. Its crypto partners enable the transactions by first converting the digital assets on their end to traditional currencies, and then transmitting them through to the Mastercard network.
According to Dhamodharan, the company’s shift towards crypto will reduce inefficiencies, eliminating the need for both consumers and merchants to convert back and forth between crypto and traditional.
He also noted that Mastercard is currently working with a number of major central banks globally, to support the launch of new digital currencies, dubbed CBDCs, to offer new ways to pay.
Partnership with FAB
Mastercard has entered into a five-year strategic partnership with the UAE’s First Abu Dhabi Bank (FAB) for the enablement of commercial cards and payments solutions.
Both parties aim to work together to simplify business-to-business (B2B) payments for UAE businesses.
Under the tie-up, FAB customers will be able to access Mastercard’s commercial cards and payment platforms, in addition to a range of product benefits designed for businesses and their employees.
These include Mastercard’s exclusive In Control platform, which is claimed to help large corporates to streamline their card payments and boost their cashflow while providing advanced security.
Additionally, FAB will launch the Mastercard Purchase Card offering smart data and virtual card capabilities that will enable government and commercial payments.
The bank also plans to introduce a range of Mastercard Travel and Entertainment Cards to help corporates to enable their workforce to carry out business-related spending in a safe and rewarding manner.
FAB PBG EVP and head of Payments and Digital Ramana Kumar called the partnership a testament to the bank’s commitment to support both its customers and wider economic recovery.
Mastercard UAE and Pakistan country manager Girish Nanda added that the partnership will address the challenges that traditional channels pose for UAE businesses by making corporate payments simpler and more secure.