One of the leading names in global payment arena, Mastercard, is partnering up with R3, an enterprise-focused blockchain firm, to develop a cross-border payment platform. The focus of this platform is on connecting global payment infrastructures, schemes, and banks so that a faster and technologically-improved money transfer system is provided to the world.
Mastercard has been making long progressing strides towards global cross-border payment arena. Earlier this year, the company was seen acquiring Transfast, another company with cross-border reach in terms of making payments.
Now, by using the blockchain-based Corda ecosystem provided by R3, Mastercard is taking one big step forward covering another dimension. This also shows that Mastercard is coming up with a multi-faceted approach to dominate the global payment arena.
Adding more arsenal to the already existing inventory with this partnership, Mastercard is trying to take the currently prevailing issues such as high-processing overheads, liquidity management, lack of standardization, different clearing systems and very incoherent connection between banks across the globe.
The executive vice president of the New Payment Platforms for Mastercard, Peter Kein, said in the official announcement:
Developing a new and better cross-border B2B payments solution by improving worldwide connectivity in the account-to-account space is central to Mastercard’s ambition. 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.
Cross-border payments have never been easier even after the emergence of the internet. There are a lot of overheads and procedures involved with sending money across the border. Besides, high processing fees also present a particular pain point. For enterprises, which tend to move huge amounts of money, processing fees cause huge overheads in monetary terms. But ever since the emergence of blockchain technology and cryptocurrency, the dynamics are changing.
Cryptocurrencies provide a cheaper way of sending money abroad within very short spans of time. But the volatility associated with cryptos such as bitcoin often makes them an unattractive option. With blockchain being adopted by Mastercard in order to transfer fiat, things are much more attractive as the brand supporting the tech is already big in the market.
Talking about R3’s role in providing the cross-border payment solution to Mastercard, the CEO of R3, David E. Rutter said:
We are excited to partner with Mastercard to help shape the future of the digital payments ecosystem. 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. 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.
Blockchain technology is expanding at a very rapid pace across various industries with all the promises that it brings to the table. We have already seen big names like Walmart, LVMH, BMW, etc. experimenting with this tech to make their frameworks better. With even Facebook adopting the tech, it is clear that blockchain technology is going to play a very big role in the economy of the future.