Mastercard to let US merchants and banks offer crypto services on its network

The move reflects a growing trend to seek out crypto assets as an option for daily purchases

File: Mastercard will tie up with digital asset platform Bakkt, allowing partners in the US to enable their customers to buy, sell and hold cryptocurrency (AFP via Getty Images)

Mastercard will soon allow merchants, banks, and fintech operators in the US to offer cryptocurrency services and products on its network.

The global payments giant will tie up with digital asset platform Bakkt, allowing partners in the US to enable their customers to buy, sell and hold cryptocurrency and streamline the issuance of branded crypto debit and credit cards, the company said on Monday.

“This means that consumers can earn and spend rewards in cryptocurrency instead of traditional loyalty points and seamlessly convert their crypto holdings to pay for purchases,” the companies noted in a joint statement.

“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,” Sherri Haymond, executive vice president of digital partnerships at Mastercard, said in a statement.

The partnership between Bakkt and Mastercard reflects a growing trend among consumers to seek out crypto assets as an option for daily purchases.

A consumer survey of 2,000 US consumers by Bakkt found nearly half of the respondents reported purchasing crypto in the first half of 2021, while 32 per cent of those who didn’t said they were either “very” or “somewhat” interested in doing so by year end.

Another survey by Mastercard, called the Mastercard New Payments Index, also pointed out that 77 per cent of millennial respondents were interested in learning more about cryptocurrency, while about three-fourths said they would use cryptocurrency if they understood it better.

Interviews of 15,000 consumers in 18 countries, including Australia, India, Thailand, US and Canada, were conducted.

“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,” Nancy Gordon, executive vice president of loyalty rewards and payments at Bakkt, said in a statement.

Both the companies, however, have not revealed which cryptocurrencies would be allowed for use on the Mastercard network.