The second most widely used global payment system, MasterCard (MA), successfully adapts to market changes and increases competition pressures. Over the past 12 months, MasterCard shares rose by 41.39%, and from the beginning of 2021, MasterCard increased by 6.95%.
Following digital payment practices, digital currencies may become more important to the profits and revenues of MasterCard.
A MasterCard study indicates that nearly 20% of consumers in some countries own crypto-currency today. Merchants and financial institutions have started to offer digital currency as a settlement option to their customers.
To capitalize on this trend, MasterCard expanded its cryptocurrency program last year, making it easier for partners to issue cryptocurrency payment cards. Recall that Mastercard is not a bank but a payment system that transfers funds and charges commissions for transactions.
Using cryptocurrencies with MasterCard
With the partnership with BitPay, MasterCard can offer payment processing services for Bitcoins and Bitcoin Cash. Bitcoin and other digital currencies can now be used at checkout with Mastercard and BitPay’s crypto card. Mastercard’s shares rose due to this event and recovered almost as much as they had dropped in early February-March 2020 when COVID-19 hit the country.
Using funds transferred from BitPay’sBitPay wallet, consumers can shop in physical stores or online (wherever Mastercard is accepted). As a result, consumer funding cards through BitPay are in fiat currency, e.g., US dollars.
The number of BitPay transactions hit a record high in July following the launch of this cryptocurrency map, and the MA stock has recently announced support for Apple Pay. Support for Samsung Pay and Google Pay will be launched later this quarter.
With London-based fintech firm Wirex, Mastercard launched a cryptocurrency debit card for the European market. This card operates differently from the BitPay card by offering consumers a choice of 18 digital currencies, which keep their cryptocurrency funds until they make a purchase. Additionally, consumers can receive two percent 2% cashback on all online and in-store purchases with the Wirex debit card.
With cryptocurrency payments in vogue, MasterCard aims to process payments.
Even though bitcoin payment cards have different features, they all have the same thing: convert Bitcoins into fiat currency sometime before a transaction. Mastercard processes fiat currency transactions through its network. However, soon the situation may change, and then the financial sector will undergo a true revolution.
Michael Meebach, Chief Executive Officer of Mastercard, announced plans to add digital currencies directly to its network, eliminating the need to convert one currency to another.
Cryptocurrency payments will spread faster due to ease of use, and the demand will rise even higher as a result. As a result, crypto maniacs seem to be on their way to a big win since it takes away one of the main arguments against digital currencies – that they are hard to spend. The demand for crypto payments will continue to grow as cryptocurrency gains traction. If Mastercard dominates such a payment model, it will take the MasterCard to a significant new market share.
The global economy is constantly changing, and the world’s largest companies have often had difficulty adapting to the changes. The dominance of cloud companies and the Apple portable computer has replaced IBM in computing, and Blockbuster, once the most extensive media company globally, has been taken down by Netflix (NFLX).
A company that can adapt quickly and changes, following new technology and consumer preferences, wins in the contemporary world, and Mastercard stock is a good example. Analysts see this foresight as Mastercard’s success as they rate the stock with a “buy” rating.