Crypto Corner: Payment Processors Come Around

In December of last year, Visa (V), the world’s largest payment processor, launched a global crypto advisory service for its banking clients and merchants. According to the company, they are looking to attract central banks exploring digital currencies, customers interested in crypto, and retailers interested in non-fungible tokens (NFTs).

Crypto is hot right now and interest is only growing, so it’s no surprise that Visa wants a piece of the action. In a global study conducted by Visa, they found that almost 40% of crypto owners indicate that they would be likely, or very likely, to switch their primary bank to one that offers crypto-related products in the next year and there’s no way the company is going to let that large of a potential customer base slip through its fingers.

If you visit Visa’s site, they now have an entire hub dedicated to all things crypto, with new services including educating institutions about cryptocurrencies, allowing clients to use the payment processor’s network for digital offerings, and helping manage backend operations. Visa is set to launch services this year that will allow buying, selling, and custody of digital currency through its banking partners. There are also several Visa card programs that let users earn bitcoin on purchases, and the network will also allow its clients to use USD Coin (a stablecoin with its value tied directly to the U.S. dollar) to settle transactions on its payment network.

Visa’s crypto hub explains what crypto is and why they are connecting it and blockchain networks to their global payment network, stating that they are “propelling innovation to deliver even more access and value to the crypto ecosystem”. And the company boasts integrations with BlockFi, Circle, Coinbase,, Fold, Wirex, and Xapo. Visa says that customers made $2.5 billion in payments with its crypto-linked cards in its fiscal first quarter of 2022… customers are using crypto-linked cards at restaurants, on retails goods and services, and on travel.

There is definitely demand, with customers seemingly able to recognize the utility of having their Visa card linked to a crypto platform account. The company has indicated that it will continue to “lean in” when it comes to cryptocurrency… Visa is going hard in this space.

And You, Mastercard?

Visa is not the only payment processing company jumping into the space with both feet. Mastercard (MA) has decided to lean in as well, and is integrating crypto payments, recently announcing a new partnership with Bakkt. Bakkt describes itself as a company that operates a technology platform that enables consumers, businesses, and institutions to unlock the value of digital assets… they basically want to help more people be able to participate in the digital economy.

The partnership will allow merchants and banks to build crypto into their offerings and the pair have a vision to change up the way consumers collect loyalty rewards. Customers will be able to buy, sell, and hold their digital assets through Bakkt custodial wallets and then spend their loyalty rewards through crypto. The companies are hoping that this move will appeal to a younger customer demographic and will help bridge the gap with the traditional credit card payment industry.

To further expand their cryptocurrency program, Mastercard has also began extending offers to cryptocurrency companies as part of a crypto card creation program. Noting an uptick in interest due to the pandemic, Mastercard will utilize the program to work with partner companies to uncover ways they can leverage the company’s technology, expertise, and network to push business forward and invest in solutions that help bring more people into the fold of the digital economy.

Partners will be able to benefit from a partnership with Mastercard through the company supplying support in market entry, international expansion, the company’s market research, and their expertise in cybersecurity. As long as partners meet certain conditions laid out by Mastercard, such as ensuring the privacy and security of their users, sticking to relevant laws and regulations, and ensuring a level playing field for all stakeholders, a possibly lucrative partnership can ensue and hopefully bring in more customers for all parties.

Mastercard recently announced that their first official cryptocurrency platform partner is Wirex, a London-based crypto payment processor. According to Mastercard’s Executive VP of Digital Asset Products and Partnership and Blockchain, the company plans to continue to push forward in the budding space to create a secure, convenient experience for customers and business.

Wirex card users will be able to convert crypto holdings into fiat and spend that money wherever Mastercard is accepted so the currency enters the Mastercard network as fiat. Wirex seems stoked, noting that this partnership with Mastercard will allow the company to realize it’s vision of empowering everyone to live in a world where all currencies are equal, and that the partnership is proof of the recognition and acceptance of cryptocurrency by leading bodies and regulators.

Don’t count the next generation of payment processors out either. PayPal (PYPL) allows users to buy and sell Bitcoin. Block (SQ) is so dedicated to this theme that CEO Jack Dorsey changed the company’s name from Square to emphasize it.

Not Everyone Is Buying It

But while Visa and Mastercard may be gung-ho when it comes to cryptocurrencies and incorporating them into their offerings, some traditional payment platforms aren’t buying it, and American Express (AXP) is one of them. So far, the company has indicated that they will not be offering a crypto-linked card anytime soon, and that’s straight from CFO Jeff Campbell.

When asked about the subject, the company’s CEO and chairman Stephen Squeri, says that he views cryptocurrencies such as Bitcoin and Ethereum as an asset class, like gold, and cites the major fluctuations in the crypto space as one of the key reasons that AmEx won’t be venturing into the space any time soon. Although, there is chatter that the company may be looking into allowing customers to redeem membership rewards points for cryptocurrencies.