How to Stay Relevant in FinTech: Could Mastercard be Launching its Own Digital Currency?
Many players in the financial markets, including payments companies, face strong pressure about development of digital currencies, which are gaining momentum. As cryptocurrencies are advancing their credibility, attracting increased interest from people all around the globe, a lot of large companies out there are starting to experiment with their own digital currency solutions. Here is a great example. Mastercard – a large payments provider behind one of the world’s major payments processing networks – is planning to develop its cryptocurrency capabilities. The company is building its own cryptocurrency team that will be monitoring cryptocurrency ecosystem trends and developing new cryptocurrency products and solutions.
No, this does not mean that Mastercard will launch its own digital currency. Yet, it is clear that the company wants to be a part of the digital currency word. Positioning itself as a global technology company and an innovation lab, it has to ensure that it stays relevant in the growing and rapidly changing FinTech space. Despite partnering with Facebook on its digital currency Libra, Mastercard clearly wants to hedge its bets. After all, it is equipped with the right competences and reputation when it comes to handling money.
With fees being a major topic of contention, companies offering the lowest fees will succeed in the longer term. Stable coins – cryptocurrencies that are pegged to the US dollar or some other currency – are transforming the space with a promise to change the way we transfer money domestically and internationally. Here Mastercard has a role to play. There is already some progress underway in decreasing fees and making the process easier. For instance, both Mastercard and its peer Visa have already committed to cut inter-regional interchange currency fees in a legally binding pledge under the European Union antitrust regulations. Thanks to these commitments, costs borne by retailers for accepting payments with cards issued outside of the European Economic area will be reduced, benefitting all consumers.