Mastercard partnered is set to cryptocurrency finserv platforms Amber Group, Bitkub, and CoinJar to launch crypto payment cards in Asia-Pacific, per a press release.
The cards will convert digital tokens into fiat currency that can be used anywhere Mastercard is accepted. The initiative is part of Mastercard’s global crypto card program, which seeks to support native digital currencies as payment tools.
How we got here: The total market value for crypto assets hit $3 trillion, roughly quadrupling from the end of 2020, per Bloomberg—indicating growing demand for digital currencies.
As a result, issuers are looking to capitalize on these assets: Major financial institutions—like JPMorgan, Wells Fargo, and Capital One—increased crypto talent hiring by 40% in the first half of 2021 compared with the same period last year, per LinkedIn data. Facilitating crypto payments may therefore be an attempt to keep issuers tied to Mastercard’s network as they start thinking about offering crypto services.
The opportunities: Here’s how we think Mastercard could benefit from introducing crypto payment cards in Asia-Pacific.
- Boost payments volume by tapping into crypto demand in the region. Forty-five percent of consumers in Asia-Pacific plan to use cryptos in the next year, according to Mastercard’s New Payment Index. Younger consumers show particular interest in digital currencies: 71% said they are more open to using cryptos than they were a year ago. Introducing payment cards can help Mastercard better serve customers in the region—and increase its payments volume—especially among millennials who are entering their high-earning years and are more likely to spend using cryptos.
- Gain a stronger foothold in the burgeoning crypto payments space through collaboration. In the last year, cryptocurrency exchanges like CoinJar have emerged as formidable players in the digital payments space. Working with these types of providers lets Mastercard take advantage of their already-existing crypto technology and infrastructure—and avoid building it in-house, which can be costly. And it also gets these fintechs on Mastercard’s side before they become competitors.
The bigger picture: In February, Mastercard said it would integrate select cryptos on its network. The card network delivered on that promise with plans to service the Gemini credit card—a few months later, it launched a crypto payment settlement pilot and a blockchain startup engagement program. The company also acquired crypto intelligence and security startup CipherTrace in September.