Mastercard to Offer Blockchain based Payments in Partnership with R3 Using Corda, Crypto Industry Provides Comments

Mastercard Credit CardsMastercard (NYSE: MA) has announced a new partnership with R3 to use their Corda platform to power blockchain-based cross border payments. Corda is a permissioned blockchain that has the support of multiple financial services firms and has been experiencing additional traction.

The partnership is said to initially focus on faster global payments globally. Mastercard says this is the latest step in their “multi-rail strategy, providing customers with unrivalled choice in how they move money.”

Payments and transfers is an area where traditional finance dominates but participants have been slow to innovate and adapt. Some transfers may take days to complete yet the technology to make payments and transfers instantaneous has been around for years. Mastercard believes that by working with R3 they can leverage their existing brand while providing value for their customers.

David Rutter, CEO of R3, said they were excited to work with Mastercard on the project noting that all institutions rely on the ability to send and receive payments bot too often the technology is “cumbersome and expensive.”

“Corda was designed specifically for enterprise use cases such as this, and we look forward supporting Mastercard in bringing blockchain-enabled payments businesses across the globe,” said Rutter.

Crowdfund Insider received some feedback from blockchain industry participants regarding news of the partnership.

Filipe CastroFilipe Castro, co-founder and CIO at UTRUST, a crypto payment solution offering instant transactions, stated:

“This partnership demonstrates Mastercard’s intent to leverage blockchain technology to gain a competitive advantage. This is not Mastercard’s first foray into blockchain. Their first implementation with DLT was not in the world of payments but in the verification of the provenance of luxury goods. In payments and beyond, it is not the first blockchain project where Mastercard is involved – e.g., the creation of a blockchain for verifying the provenance of luxury goods.”

Castro said these types of investments are driven by a need to protect against disruptive change and challenges to their business model:

“Payments are a killer app for blockchain, unlike any other due to their mass appeal – a use-case that is especially relevant for the mainstream adoption of digital currencies as a means of payment. In an age of fast information & instant feedback, where digital and physical augment each other, a universally trusted, verifiable and privacy-conscious means of value transmission will play a pivotal role. This follows the same cycle of continuous technology evolution we have seen in the early ages of the internet. In the same way, email or the browser were killer apps of the early internet age, relying on protocols and foundations of years prior. Those, in turn, led to the next wave of killer apps – search engines, social networks, mobile-centric apps and more. All of those had implications beyond just technology, tackling specific segments – be it productivity, communication or human relations. This time is money itself.”

Sky Guo, CEO, and Co-Founder of Cypherium, an enterprise blockchain solution, called Mastercard’s move similar to other big corporates entering the blockchain sector. But he added that it is difficult to discern whether Mastercard recognizes the value of the tech or if it is just “corporate appropriation.”

“On one hand, we can’t survive as new financial systems without meaningful recognition from and conversation with legacy systems, such as MasterCard and other centralized goliaths,” said Guo. “On the other hand, these technologies—especially the public blockchains—pose a very real threat to the business models of a number of these companies, and in order to quell their disruption, giants like MasterCard want to absorb crypto projects on their own terms.”

Guo added that he believes there will be little need for the kind of private DLTs from the likes of JP Morgan, Facebook and now Mastercard, if blockchains scale to their full extent.

“The true killer Dapp will make obsolete these private networks; it will be faster and cheaper to use while returning financial economy to its users; that is the promise of Bitcoin that so many new chains are trying to fulfill. So one can see that their motivation in entering the space is, at least partially, guided by their need to street the conversation, to dictate the way in which blockchain technology enters the world. For now, though, blockchain must support and participate in these projects.”

charles luCharles Lu, CEO of Findora, pointed to the fact the partnership between R3 and Mastercard is a pilot program and may never go beyond proof of concept:

“… the news that Mastercard is to develop a blockchain-based cross-border payments platform is a welcome move,” said Lu. “Tech giants such as Mastercard play an influential role in encouraging the acceptance of cutting-edge technologies and this news is symbolic of Mastercard’s willingness to challenge the status quo and seek solutions to improve current payment systems.”

Lu added that change is on the horizon:

“we are witnessing cryptographic breakthroughs including zero-knowledge proofs, multiparty computation, and scalability solutions — all of which have the potential to shake up the financial industry as we know it.”

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