Which Major Credit Card is Embracing the Blockchain?

bitcoin

If you don’t know the differences between Bitcoin and the blockchain, be sure to read up on them – this new industry is changing online payment processing in a major way. Essentially, blockchain is a computer network that functions as a ledger system. This public ledger provides a way to keep perfect records of all transactions. The blockchain is also an important part of other cryptocurrencies, like Ethereum.

Visa specifically has been focused on using the blockchain to provide real-time payments for businesses of all sizes. While Visa got a head start, it appears they’re not the only major credit card company interested in this space.

Recently, Mastercard announced their new Blockchain API. Let’s take a look at what exactly that means for you as business owners.

Understanding the Mastercard Blockchain API

At the Money 20/20 Hackathon in Las Vegas, Mastercard announced this new payment service. Like Visa, Mastercard hopes their Blockchain API is used for B2B transactions. Their official press release included a statement about this solution providing “a new way for consumers, businesses and banks to transact and is key to the company’s strategy to provide payment solutions that meet every need of financial institutions and their end-customers.”

What many industry experts found interesting is that, at the beginning of October, Mastercard’s CEO Ajaypal Singh Banga said “non-government mandated currency is junk.” But there are significant differences between individual cryptocurrencies and the blockchain itself. And, given that the founder of Ethereum previously said he believes the blockchain has the potential to replace credit cards, it makes sense why Mastercard would want to dip their toes in this area.

What This Blockchain API May Mean for Your Business

Not only is the blockchain a digital transaction ledger, it’s also decentralized. That means it can be used to process transactions in a way that’s both scalable and flexible. The new blockchain API builds on MasterCard’s existing payment network, which covers some 22,000 financial institutions, and also expands the blockchain’s capability to handle transactions.

Since speed, transparency and costs for cross-border payments are issues that often plague the B2B space, Mastercard is looking into ways to solve each with this technology. So, what exactly do all these developments mean for your business? If your business falls into the B2B space, it’s definitely worth exploring this new API to see if there are any ways it can improve your current payment options.

And even if you sell to consumers instead of other businesses, Mastercard’s initiative is an important reminder of how quickly payment processing continues to evolve. If you’re currently stuck with a legacy processor that isn’t keeping up with the pace of innovation, it’s time to start looking into other potential processing companies.

 

 

Posted on Monday, November 13th, 2017