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Mastercard Partners with Wirex to Provide Cryptocurrency Service for Users
Mastercard is the latest mainstream payments company to join the cryptocurrency revolution. This news comes just one month after PayPal, Wealthsimple, and VISA plan their own crypto strategies. The addition of more highly reputable companies brings a lot of legitimacy to the cryptocurrency space. Even in light of the recent rise in hacks, scams, and schemes, highly trusted companies have decided to put resources into building the cryptocurrency industry. It is no wonder that these companies decided to explore cryptocurrency. Each one of the companies pioneered much of the digital payment and investments space in the last 30 years. Now, cryptocurrency stands to disrupt the very fabric they established. How exactly will these companies adapt?
Mastercard and VISA
Mastercard and VISA provide physical cards that interact with payment systems. The companies themselves partner with financial institutions to connect them to the actual payment networks. They then change a fee, anytime one of their cards is swiped in a terminal. Looking at the VISA and Mastercard business model in this way, cryptocurrency offers an opportunity, rather than a barrier. It shouldn’t matter how the end consumer chooses to pay the merchant. If the consumer wants to use cryptocurrency, then VISA and Mastercard should be able to earn their cut. The trend in the industry is to allow users to spend their cryptocurrency, by handling the foreign currency conversion in the middle.
Mastercard Partners with Wirex
Wirex has been a cryptocurrency company operating since 2014, offering a kind of crypto bank account to its user base. Several companies such as Nexo, and Crypto.com are already offering crypto VISA debit cards. This is prompting other large actors in the industry to follow suit. Mastercard will be providing the physical cards to Wirex. This will allow both Mastercard and Wirex to do what they are respectively good at. Wirex can provide a next generation bank account to its user base. Mastercard can provide the physical cards and payment infrastructure needed to facilitate the spending of cryptocurrency.
The Crypto Spending Problem
One of the biggest challenges within the cryptocurrency industry, is getting people to actually part with their cryptocurrency. Hodling is a strategy that a large number of cryptocurrency users have adopted. It is very common for the retail investor to buy, and store their cryptocurrency long into the future. It is for this reason that cryptocurrencies such as bitcoin and ether, are seen more as investments, rather than as spendable money. The companies that are trying to fuel the spending of cryptocurrency are also integrating stablecoins into the payment networks. Stablecoins offer users the flexibility of cryptocurrency, and the stability of government money.
Payments in general, is a highly competitive space. If people already in the crypto space are given more incentive to spend their cryptocurrency, then billions of dollars may be unlocked. This is the potential that these large companies see. Mastercard clearly could not stand by and watch as VISA, and PayPal joined the cryptocurrency race. As anyone who is familiar with capitalism is aware, competition is what moves industry forward by leaps and bounds. With three payment provider powerhouses in the race, cryptocurrency will officially become spendable.
