Visa and Mastercard are working on ways to handle the mechanics of crypto payments themselves than depending on third parties. If they succeed, it would mark a major turning point. Currently, credit cards are inclined towards banks, fintech companies, and other businesses. Stepping into the crypto domain would have a big impact on the way consumers and merchants make transactions.
Paying for sandwiches, clothing, or shopping in the supermarket could be paid with a card that’s funded by cryptocurrencies like debit cards linked to checking accounts. More financial institutions would issue such cards for consumers. This means more merchants would begin accepting stablecoin or crypto as payments. It should be noted that Chipotle Mexican Grill Inc., AT&T Inc., and Overstock.com Inc., are already accepting crypto payments.
However, there are some confusion and challenges. The main question is as to how merchants will find a way to bypass cards when taking crypto payments, saving themselves from fees when accepting debit or credit cards. Experts say security challenges must be addressed. For this, nationwide regulation is needed to require financial institutions to have reserves to support the cryptocurrencies they hold.
The recent crypto market crash has shaken and rattled investors and digital asset companies alike. But it hasn’t deterred payments companies from pressing forward with their plans for crypto-backed payments. Cuy Sheffield, global head of crypto at Visa, says there is a continued interest from their existing clients and new developers coming into the space. He shared that Visa wants to take a long-term perspective on how crypto can impact payments and focus on adding as much value to the ecosystem.
Jorn Lambert, Mastercard’s chief digital officer, said in 2021 that Mastercard doesn’t really see demand for crypto payments today, but sees it in the near future. PayPal Holdings has also stepped into this field. It began to offer crypto payments last year. Consumers have the option to choose crypto that they store in accounts on the PayPal platform. Crypto is converted into the local currency through a partnership with Paxos. PayPal is then able to send the payment to the merchant.
Cryptocurrency is no longer isolated to wealthy investors. It has penetrated into the lives of the common men. And credit card companies know that not enabling crypto payments could mean cutting out a growing and dominant form of payment.