Mastercard and R3 are teaming up to develop a blockchain-powered cross-border payments system. The goal is to achieve faster global payments and improve the underlying infrastructure.
Mastercard Diving Into Blockchain Solutions
In a press release, Mastercard said the two firms have signed a deal to develop and pilot the payments solution. The collaboration plan brings together Mastercard’s payment systems assets, brand, and distribution with R3’s blockchain expertise.
The partnering firms want to tackle industry issues such as costly payments processing, liquidity management, and a row of standardization and connectivity issues between banks and domestic clearing systems.
R3 CEO David E. Rutter said:
“All institutions – large or small – rely on the ability to send and receive payments, but all too often the technology they rely upon is cumbersome and expensive. Cross-border payments can be a particular pain point.”
According to the press release, this is part of Mastercard’s plan to strengthen its cross border payments network, expanding on its recent acquisition of global payments company Transfast earlier this year.
The collaboration with R3 is part of the payment giant’s strategy, which focuses on improving worldwide connectivity in the account-to-account interactions.
Peter Klein, Executive Vice President of New Payments Platforms at Mastercard, stated:
“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.”
Staying Ahead in the Payments Industry
Cross-border payments is a hot topic in the industry right now. Cryptocurrencies and ledger solutions have emerged as better alternatives to the old legacy infrastructure. Mastercard, as one of the leading payment providers, is looking to maintain its edge by embracing the new technology, despite the CEO once stating that blockchain is overhyped.
Mastercard has been on the lookout in the cryptocurrency space for some time. While its venture with Facebook’s Libra might fail to take off, Mastercard has been reportedly assembling a blockchain development team.
On the other hand, R3 has had a stellar year so far with various partnerships and initiatives announced. R3’s Corda Enterprise will be tested across different industries, from capital markets to supply chain management, and used by leading institutions, including financial institutions, central banks, and trade associations.
As David Rutter, CEO of R3, states, Corda is a good fit for what Mastercard aims to achieve:
“Corda was designed specifically for enterprise use cases such as this, and we look forward supporting Mastercard in bringing blockchain-enabled payments businesses across the globe.”
What is your opinion on Mastercard delving deeper into the blockchain space? Share your ideas in the comments!
Images are courtesy of Shutterstock.