MasterCard has teamed up with FinTech company Bakkt allowing thousands of banks and merchants onto its payments network in the US and offer a broad set of cryptocurrency solutions and services.
Georgia, US-based Bakkt will expand the company’s ecosystem of cryptocurrency partners, enabling crypto-as-a-service that aims to provide customers quick access to digital assets capabilities.
In turn, consumers will also be able to spend the cryptocurrency rewards they earn at retailers on MasterCard’s network. They will be able to buy, sell and hold digital assets through custodial wallets powered by Bakkt’s digital asset platform.
“MasterCard is committed to offering a wide range of payment solutions that deliver more choice, value and impact every day,” Sherri Haymond, MasterCard’s executive vice president of digital partnerships, said.
“Together with Bakkt and grounded by our principled approach to innovation, we will not only empower our partners to offer a dynamic mix of digital assets options, but also deliver differentiated and relevant consumer experiences,” Ms Haymond said.
Following the announcement, Bakkt shares surged 40 per cent to $12.8 and MasterCard stock jumped about 1 per cent to $361.2 a share on Monday.
Launched in 2018, Bakkt — which spun off from Intercontinental Exchange — is a digital-asset platform that enables consumers to buy, sell, store and spend digital assets.
Users continue to look for new digital assets to use for everyday purchases.
Nearly half (48 per cent) of US respondents said they had purchased some type of crypto in the first half of this year, Bakkt found in its consumer crypto survey, in which 2,000 people were interviewed.
The MasterCard new payments index shows that 77 per cent of millennials said that they are interested in learning more about cryptocurrency, with 75 per cent admitting they would use cryptocurrency if they understood it better.
MasterCard will also integrate crypto into its loyalty solutions. It will allow its partners to offer cryptocurrency as rewards and create interchangeability between loyalty points and other digital assets.
This means that consumers can earn and spend rewards in digital currencies instead of traditional loyalty points and convert their crypto holdings to pay for their purchases.
“We are incredibly excited to partner with MasterCard to bring crypto loyalty services to millions of consumers,” said Nancy Gordon, executive vice president of loyalty rewards and payments at Bakkt.
“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,” Ms Gordon said.
Rival payments company Visa said more than $1 billion was spent by users on products and services through cryptocurrency-linked cards globally in the first six months of the year.
Mainstream companies are increasingly accepting cryptocurrencies as payments.
FinTech company PayPal is offering its customers the option to use digital currencies to pay for purchases through online merchants. It also created a dedicated business unit to focus on blockchain and crypto.
US-based food and beverage company Pepsi is also discussing options to buy Bitcoin.
Ride-hailing company Uber’s chief executive Dara Khosrowshahi has said the company will accept Bitcoin and other cryptocurrencies as a form of payment if it benefits the business.
