Mastercard and Bakkt are partnering on a new cloud-based cryptocurrency solution.
Mastercard is making a move that could lead to wider usage of bitcoin and other cryptocurrencies as payment for retail purchases.
The payments network giant is partnering with digital asset platform Bakkt to enable crypto-as-a-service, which will provide retailers and other businesses in the Mastercard network with quick, cloud-based access to cryptocurrency capabilities.
Mastercard’s cryptocurrency services partners will be able to use the new hosted service to offer cryptocurrency solutions. These will include tools that enable consumers to buy, sell and hold cryptocurrency assets through Bakkt-based digital wallets, as well as streamlined issuance of branded crypto debit and credit cards.
Mastercard will also integrate cryptocurrency capabilities into its loyalty solutions, enabling its partners to offer cryptocurrency as rewards and integrate loyalty points and other digital assets. This means that consumers will have the ability to earn and spend rewards in cryptocurrency instead of traditional loyalty points, and also seamlessly convert their cryptocurrency holdings to pay for purchases.
“Mastercard is committed to offering a wide range of payment solutions that deliver more choice, value and impact every day,” said Sherri Haymond, executive VP, digital partnerships at Mastercard. “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.”
Cryptocurrency, particularly bitcoin, is becoming an increasingly popular means of digitally paying for retail purchases. Pacsun recently became the first major brand in the fashion and retail space to accept bitcoin and other cryptocurrencies using blockchain payment provider BitPay.
Meanwhile, retailers including Newegg and Camping World also partner with BitPay to engage in cryptocurrency transactions. And Sheetz is the first convenience store retailer to accept payments via bitcoin, utilizing technology from NCR and Flexa.
The two biggest U.S. retailers of them all are also displaying interest in cryptocurrency, including bitcoin. In July 2021, Amazon posted a job listing for an “experienced product leader” to head its digital currency and blockchain strategy and product roadmap, although the e-tail giant subsequently denied having specific intentions in the digital currency blockchain space.
In August 2021, Walmart posted for a director-level executive to oversee digital currency and cryptocurrency products on LinkedIn. More recently, the discounter launched a pilot program that allows customers to purchase bitcoin through Coinstar kiosks in 200 of its stores.
“We’re incredibly excited to partner with Mastercard to bring crypto loyalty services to millions of consumers,” said Nancy Gordon, executive VP, loyalty rewards & payments at Bakkt. “As brands and merchants look to appeal to younger consumers and their transaction preferences, these new offerings represent a unique opportunity to satisfy increasing demand for crypto, payment and rewards flexibility.”
Mastercard has launched several other cryptocurrency initiatives. This includes the acquisition of the CipherTrace data security platform, partnerships with leading cryptocurrency companies, and the creation of new platforms to test and support central bank digital currencies.