Mainstream payments titan Mastercard continues to make notable forays into the blockchain space.
The latest embrace was announced on September 11th, when the company unveiled it had entered into a strategic partnership with the enterprise blockchain consortium R3, the backers of the open-source Corda blockchain project.
Namely, the collaboration will see the two organizations “pilot a new blockchain-enabled cross-border payments solution” for “connecting global faster payments infrastructures, schemes and banks supported by a clearing and settlement network operated by Mastercard.”
The meld is about staying at the tip of the spear of global payments said Peter Klein, Mastercard’s executive vice president of New Payment Platforms:
“Developing a new and better cross-border B2B payments solution by improving worldwide connectivity in the account-to-account space is central to Mastercard’s ambition. Our goal is to deliver global payment infrastructure choice and connectivity as demonstrated through our recent strategic acquisitions and partnerships, including our relationship with R3. It confirms our commitment to innovation, both home-grown and through partnerships and acquisitions, to support advances and innovation in the increasingly complex global payment infrastructure space”
Deeper Down the Blockchain Rabbit Hole
The news comes after several major blockchain-centric job openings appeared on Mastercard’s in-house jobs tracker portal last month. Positions being sought included “Blockchain Solutions Architect” and “Director, Cryptocoin/Wallet Product Management.”
Those postings indicated the company was preparing to ramp up its blockchain activities further, so the R3 partnership appears to be just the first of many related activities to come as Mastercard continues to dive deeper into the blockchain ecosystem.
Of course, Mastercard also made waves back in June when Facebook revealed that the company was among the first 29 organizations that had agreed to join the Libra Association, the governing body that will administer Facebook’s proposed Libra stablecoin cryptocurrency. And while rumors have recently swirled that some of those organizations have considered backing out of the project, Mastercard has offered no indication yet that it’s among the lot whose interest has waned.
Lots Happening Around Cross-Border Payments
With the Mastercard-R3 meld as just the latest example, there’s been lots of movement in recent months regarding large players exploring blockchain tech for efficiently facilitating international payments.
For example, in July news broke that Japanese authorities were considering whether to create a cross-border network for cryptocurrency payments, not unlike SWIFT for mainstream banking payments.
One month before that, Mastercard competitor VISA announced the Visa B2B Connect network, which was built atop the Hyperledger Fabric blockchain and designed to help enterprises make inexpensive international transfers.
In the spring, a dozen large banks collectively invested $50 million USD into Fnality, a startup focused on using the utility settlement coin (USC) in interbank payments. And not long before that, American banking giant J.P. Morgan revealed its JPM Coin, which is likely to be used within the bank’s interbank blockchain rail, the Interbank Information Network (IIN).
Taken altogether, these developments bode for some serious competition to Ripple, the backers of the XRP cryptocurrency — a cryptocurrency whose main use case is commonly said to be cross-border payments.
The firm is undoubtedly feeling the pressure, or at least to will the keep fighting for its position near the front of the cryptoeconomy’s pack considering XRP is currently the third largest cryptocurrency according to market capitalization. Last month, Ripple chief executive officer Brad Garlinghouse said the company was exploring a series of acquisitions and investments to help improve its position.
“We’re in a very strong position, our business is growing strongly, we have a strong balance sheet, and I intend to press our advantage,” Garlinghouse said.
Accordingly, Garlinghouse and his associates will need to move such intentions into fruition to stay ahead of its like-minded competitors.