Category Archives: Mastercard

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New Google Ad Takes Dig at Power-Hungry Crypto

Google hardly improved its relationship with the crypto community after its earlier ban on advertising this year, despite a recent partial climbdown but now, the media giant seems to have shown its true colors in advertising of its own.

The initial June ban was introduced according to Google to “protect” customers, including advertising for ICO, crypto wallets, exchanges, and cryptocurrency trading advice. At the time of the ban, a Google spokesman commented that:

“We don’t have a crystal ball to know where the future is going to go with cryptocurrencies, but we’ve seen enough consumer harm or potential for consumer harm that it’s an area that we want to approach with extreme caution.”

Google has clearly got a problem with crypto, as its latest piece of advertising clearly telegraphs. An ad for its new Call Screen phone service, designed to allow people to interact with callers before picking up, has one character asking another if he’s “going to live that (crypto) lie?”.

The ad refers to one character’s overblown electricity bill with the provider suggesting “cryptocurrency mining [takes] a lot of energy,” a clear reference to an ongoing argument that claims that the crypto industry is draining energy due to its high power requirement; an argument which is equally disputed by some experts.

This week Google also put another spanner in the works with Berkshire Hathaway chief executive Warren Buffett, JP Morgan Chase boss Jamie Dimon and Mastercard CEO Ajay Banga all being listed on the site as “CEOs of bitcoin”. It’s a well-known fact in the crypto community, that far from being connected with crypto, the three have all spoken out against Bitcoin and cryptocurrencies in the past and rarely express positive views about the industry as a whole. Google’s response to the error came quickly:

“Entities in the Knowledge Graph and associations between them are automatically generated based on available information on the web… It’s not always perfect, and when we’re made aware of incorrect associations, we work to fix the error.”


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Mastercard Secures Multi-Currency Blockchain Patent

Multinational financial services corporation Mastercard has won patent rights to a blockchain partitioning method that would make storing multiple forms of cryptocurrency on a singular blockchain possible.

Why is this so significant?

As explained in Mastercard’s application, all established blockchain systems require each block to maintain data of the same format, type, and sometimes size. This is what makes blockchains incapable of supporting different cryptocurrencies or combining permissioned and open access data on the same chain.

Operating multiple blockchains at once to manage this data uses what is described in the document as a ”significant” amount of resources and computing power.

Mastercard’s application

What Mastercard proposes in its patent filing, is a blockchain that can be divided into a plurality of separate sects that manage these opposing data sets, dubbed ”subnets”. The document notes that the transaction records of each of the subnets are capable of differing in format and allowing different cryptocurrencies to be transacted.

Each completed block would be stamped with a hash code that applies to all of the transactions. This new blockchain system is described by Mastercard as ”more robust” with a ”greater utility” than those currently being utilized.

Its implication

One of the issues pointed to in the debate over how to expand cryptocurrency users is the need to improve accessibility and ease of use. If different cryptocurrencies can be transacted on a singular blockchain, more investors may be encouraged to purchase a variety of tokens, as one specific token no longer requires as many areas in which it can be used.

The issue of this fragmented ecosystem has been discussed by the Vice President of Cobinhood, Hsuan Lee. With so many blockchains established with no protocol to communicate with each other, their overall effectiveness suffers. He framed the predicament in terms of social media: ”Can you imagine using Facebook if you only have five friends on the platform? It’s not very useful.”

The US Patent and Trademark Office published the approved application from Mastercard Tuesday. It was first filed in July 2016.


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Mastercard Considers Blockchain for Point-to-Point Payments

Credit card giant Mastercard is lining up for blockchain as it files patents to improve the tracking of consumer payments.

The company has expressed that “point-to-point” transactions could be registered efficiently as they are processed using DLT. In line with this patent, other filings remain ongoing. The US Patent and Trademark Office has an outstanding application filed last year entitled ‘Method and system for recording point to point transaction processing’.

Mastercard has made a very clear distinction between blockchain technologies, however, labeling the latter as “junk” in previous comments. In a recent comment, Mastercard stated:

The use of digital ledgers, such as blockchains, may further facilitate the services provided by such a platform, by enabling data to be stored clearly and in a format that is easily auditable by participating entities. In cases where ledgers like blockchains are used, the leaders may be provided even more benefits as they may be immutable and resistant to tampering, which may further increase the reliability of such data.”

Back in 2016, Mastercard released some preliminary APIs: Blockchain Core API, Smart Contracts API and Fast Pay Network API. The implementation of blockchain technology is set to change the way in which consumers pay for goods and services. Mastercard, like Santander with its blockchain phone app, will be working alongside San Fransisco-based technology firm Ripple to realize its blockchain future.

Another significant patent filed by Mastercard which came to light only recently shows the company’s intent to pursue the viability of blockchain technology. Titled ‘Method And System For Payment Card Verification Via Blockchain’, the patent described a fully functional system that could replace physical credit cards. The patent was originally filed in December 2016 but only became visible to the public earlier this year in June.

American Express also has no intention of being left behind in the blockchain race as these patents wait for approval, continuing to look at ways of incorporating the new technology into its own business model. It has a current patent awaiting approval for offering customer-specific types of rewards including points, a virtual currency, or specific items tied to a product.


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Bitcoin Could Be Death Blow for Credit Card Use

The use of digital currency could pose a real threat to credit card companies by pushing down their often exorbitant fees or even by driving some out of business.

Even cash is making a comeback in some areas as the public becomes increasingly tired of hearing of credit card companies’ huge profits on the back of poor quality service and high fees passed on to the customer.

As an illustration of this frustration, recent system crashes by both Mastercard and Visa recently brought a flood of complaints from Bitcoin loyalists. At the time, Financial Times reported that regulators were “already intensifying their scrutiny of apparent fragilities in the payments system”.

With growing competition across the retail sector, alarm bells should be ringing for the likes of Visa, Mastercard and Amex. Bitcoin is already beginning to look like an obvious replacement, shredding credit card fees and offering quick and transparent payment solutions. Ian DeMartino writes in ‘The Bitcoin Guidebook: How To Obtain, Invest, And Spend The World’s First Decentralized Cryptocurrency‘ that merchants also need to wake up:

“From a merchant perspective, Bitcoin has the advantage of not having large fees from credit card companies that cut into profits… For merchants with small profit margins, that fee could be up half or more of their profits for each credit card transaction.”

As well as a boon to the merchant’s business, power can be shifted away from corporations with ungainly profits back into the hands of those who need the service: the consumers. Kris Marszalek, co-founder and CEO of, sees the current financial climate as perfect timing for a major change in perception by both merchant and consumer, arguing:

“The banking and payment sector is ripe for disruption… The entire credit card business model is focused on wringing money out of people who can’t afford credit card debt: late fees, penalties and high-interest rates.”

The opportunities for simple cryptocurrency payments outside of the credit card system are endless, whether it be payment by fingerprint recognition linked a crypto wallet or a linked crypto debit card. As Arran Stewart, co-owner and CVO of points out, all that’s stopping this becoming a reality for the general public as a whole is the stability of the cryptocurrency market. This he suggests, “will come in time and as transaction volumes continue to increase”.

Jonah Lehrer, author of ‘How We Decide‘, is not so certain, claiming that people are attached to their credit cards:

“When you buy something with cash, the purchase involves an actual loss — your wallet is literally lighter. Credit cards, however, make the transaction abstract, so that you don’t really feel the downside of spending money.”

Fair comment, but until now the world has lived with a card versus cash scenario. With digital currencies, this is set to change.


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Bitcoin Transaction Volume Surpasses Discover, Briefly Surpassed PayPal

A crypto analyst on Twitter named Yassine Elmandjra posted some interesting charts which show the growth of Bitcoin’s USD transaction volume throughout the years, showing that Bitcoin has surpassed Discover, a major credit card, and PayPal.

A brief initial fact check on this analysis finds that Bitcoin does appear to have processed more USD transaction volume than Discover. However, while briefly having more volume than PayPal, it probably has not surpassed it on average.

Look 👀 at the transaction *value*, NOT the transaction *volume*. $3-4 B worth of bitcoin has been transacted daily in the last year. At ~ $1.3T annually, Bitcoin’s base layer transactional value is within an order of magnitude away from Visa’s.

— Yassine Elmandjra (@yassineARK) August 22, 2018

Before 2017, Bitcoin’s daily transaction volume was USD 100 million and even lower, and in 2017 Bitcoin’s USD transaction volume skyrocketed as Bitcoin’s price went up by an order of magnitude. In December 2017 and January 2018, Bitcoin volumes exceeded USD 5 billion on some days and averaged USD 4 billion for about a month. However, as Bitcoin’s price crashed downwards throughout 2018, so did its USD transaction volume. During the summer months of 2018, Bitcoin’s transaction volume averaged USD 500 million with some days as high as USD 1 billion, still far higher than before 2017.

This is far lower than Bitcoin’s exchange volume which is more than USD 4 billion per day on spot markets and perhaps double that when including derivatives markets like BitMEX and the futures in Chicago. Bitcoin exchange trading occurs off chain and isn’t being used for payments for goods or services. This article is specifically trying to explore Bitcoin’s real transaction volume for goods and services.

At the least, in 2018 Bitcoin’s transaction volume is USD 500 million a day, which would yield USD 182.5 billion of Bitcoin transactions per year. That is the most conservative estimate. This exceeds Discover, a major credit card, which in the most recent quarter had a volume of USD 36.3 billion which yields USD 145.2 billion per year, slightly more than the USD 128 billion in Elmandjra’s chart. The fact that Bitcoin has more transaction volume than a credit card like Discover is a major milestone.

As far as the claim that Bitcoin has more transaction volume than PayPal, that isn’t quite true. During the month when Bitcoin had daily transaction volumes of USD 4 billion, it likely did exceed PayPal. In the most recent quarter, PayPal had a transaction volume of USD 139.4 billion, translating to about USD 1.5 billion per day or USD 558 billion per year. At the current average transaction volume of USD 500 million per day, which is a rough estimate, PayPal is far ahead of Bitcoin.

When averaging in the rally of late 2017 and the high transaction volumes of early 2018, perhaps Bitcoin could be considered on par with PayPal, depending on which estimate used but saying Bitcoin exceeds PayPal’s transaction volume seems to be an overstatement. On the other hand, it seems Bitcoin is poised to overtake PayPal again the next time there is a major rally.

As Elmandjra concludes, Bitcoin is still way behind the biggest payment services in the world, Visa, MasterCard, and China’s UnionPay which each transact many trillions of USD per year. It will probably take another order of magnitude price rally for Bitcoin to get to Visa’s level without considering adoption growth.


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Mastercard CEO Calls Cryptocurrencies “Junk” on US Visit

The war of words between the major credit card companies and cryptocurrency users seems to have stepped up another gear over the weekend with the latest slant by a top Mastercard CEO.

During the “New India Lecture” at the Indian Consulate in the US this week, Mastercard’s CEO, Ajay Banga, went on full attack against cryptocurrency calling it “junk”. During his time on stage where he was taking questions from the audience on crypto trade, he went on to say that such an “anonymized” form of currency with such wild fluctuations in the market couldn’t be regarded as a medium of exchange.

The lecture was organized as part of a series hosted by the Consulate in tandem with the US-India Strategic Partnership Forum (USISPF)

Banga wasted little time explaining that cryptocurrencies were responsible for more than 95 percent of illegal online transactions on the dark web.

Bitcoin has been the target of constant attacks, increasing in prominence in the media and popular press, particularly in 2017 when the value of the flagship cryptocurrency soared to USD 20,000 at end of the year. Voices in the financial sector have been more than ready to denounce Bitcoin and proclaim its demise.

In January of this year, a prominent study revealed that less than 1% of Bitcoin transactions was used for illicit activities, disproving one of the many myths surrounding Bitcoin’s prominence in illegal use. Yaya Fanusie, director of analysis for the Foundation for Defense of Democracies’ Center on Sanctions and Illicit Finance (CSIF), conducted the study which was called ‘Bitcoin Laundering: An Analysis of Illicit Flows into Digital Currency Services‘.

The condemnation was flying in the other direction last week when Mastercard services completely crashed out for the day, giving cryptocurrency users plenty of opportunities to remind the credit card giant why so many people started using Bitcoin in the first place. One suggestion reminded  Mastercard that a blockchain based system would solve such issues.

It appears that Mastercard is slowly taking that route as evidenced by the array of blockchain-related patents that they have acquired in an effort show more innovation regarding payments. Also, back in 2016, Mastercard released some preliminary APIs, Blockchain Core API, Smart Contracts API and a Fast Pay Network API.

Their latest patent filed recently would digitize credit cards and store them on a blockchain. The patent application is titled ‘Method And System For Payment Card Verification Via Blockchain’.

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Nordic-Baltic Region Scoops up $6.3B of Europe’s Fintech Business

According to a MagnaCarta, Fintech Mundi and Mastercard report, fintech companies are continuing to thrive in Scandinavia and also in the Baltic regions, writes Fintech Schweiz Digital Finance News.

They are reported to have created half of the industries main players in Europe to date and those firms seeking fintech partnerships is far higher than the overall 2017 European average in these regions.

At the forefront of these successes are Swedish online payment platforms Klarna and iZettle and Estonian money transfer program TransferWise which has now relocated to the UK. These three companies are reputed to have a cumulative worth of USD 6.3 billion.

Susanne Hannestead CEO of Fintech Mundi and co-author of the research explains:

“The Nordic and Baltic markets already have an incredible track record of building fintech companies having created regional successes that have gone on to become global winners, like Spotify and Zwipe.”

Its reported that there are over 500 fintech companies across the Baltic and in Scandinavia and banks are showing increased interest seeing that costing and effectiveness can be a factor of collaboration in this financial sector.

Mastercard has been a major driver of fintech in the region having recently launched its Lighthouse Development Program in partnership with NFT Ventures in the region. The project has been set up in order to trawl the sector for prospective startups and develop new technologies.

Mats Taraldsson, the head of digital business development and fintech partnerships of Mastercard Nordics and Baltics, claims that collaboration is the key to success and finding the right fintech and startup mix to deliver customer needs:

“…working together with startups and fintech is essential to meet the future needs of consumers, merchants, and governments. We have been committed to fintechs for many years, fostering partnerships with pioneers who have grown into global brands.”

The Nordic Fintech Disruptors Report 2018 does highlight some problems though, regardless of the regions capturing the larger chunk of Europe’s fintech business, suggesting that the region still lacks regulation and supervision, particularly at local levels. In fact, 45% of respondents agreed that Nordic and Baltic fintech companies needed greater support in this area. Hannestad, also co-author of the research explained:

“A more joined-up approach to fintech, and the factors that influence successful innovation between the markets governments and regulators, however, would create new opportunities for growth and productivity and ensure the region is the best place in Europe to build the next generation of fintech giants.”


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MasterCard Patenting Blockchain Tech Which Would Digitize Credit Cards

MasterCard has filed a patent application with the United States Patent and Trademark Office which would digitize credit cards and store them on a blockchain. The patent application is titled ‘Method And System For Payment Card Verification Via Blockchain’. This would be a fully functional system that could replace physical credit cards. The patent was originally filed in December 2016, but became visible to the public yesterday, 7 June 2018.

The technology would encrypt the image of a credit card on a blockchain, and it would have an associated public key and private key similar to a Bitcoin wallet. Although this data would be on a public blockchain, it would be extremely secure thanks to cryptographic encryption, and credit card information would be impossible to access without the private key. Therefore, keeping the private key safe will be crucial for the system described in this patent to be successful.

When a purchase is being made, the system will use the private key to decrypt the credit card image stored on the blockchain, providing the payment details to the merchant. This will be done by displaying a machine-readable code, possibly a quick response (QR) code, to a point-of-sale device.

Essentially, this technology would allow users to swipe their phone at a cash register and complete a payment, without using any physical card. This is similar to how people use Bitcoin for in-person transactions.

The lack of having to use physical credit cards would solve the problem of lost credit cards. If credit cards are stored on the blockchain they can never be lost, a user simply has to login to their account from any online device to access them. This will save the headache of waiting a week or two for replacement cards to come in the mail.

This credit card blockchain technology would reduce fraud. Skimmers are installed at many point-of-sale devices, and these steal user credit card information for fraudulent purposes. Since there will be no physical cards, skimming devices would become obsolete. The lack of physical cards will reduce fraud in many other ways besides this since, in general, the numbers on a physical credit card are what fraudsters use to steal money. If this information is all encrypted and not displayed physically it will be much more difficult to commit credit card fraud.

If MasterCard ends up putting this blockchain technology into real-world use it could become the biggest application of blockchain technology in history since credit cards are one of the most popular forms of payment in the modern day financial system.


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Will Bitcoin Score at 2018 FIFA World Cup as Russia Opens Doors to Crypto

This year’s FIFA World Cup 2018 in Russia is only days away and Bitcoin could be a beneficiary as thousands of football fans will now have the opportunity to spend their bitcoins at the eight-week event, reports Forbes.

Businesses and hotels at many of the stadia locations have announced that Bitcoin will be widely accepted in order to bypass Forex foreign exchange delays as the event kicks off on June 14th.

Russia is expected to see half a million tourists at the 21st World Cup tournament, with many supporters arriving from Europe and South America. Hotels in many of the locations including Moscow, Kaliningrad, and St Petersburg have been accepting Bitcoin bookings since April, and it has proven to be an excellent way for fans to avoid the usual currency exchange headaches.

Airline bookings are also available for crypto users, with budget airlines such as CheapAir and travel agency Destinia offering cryptocurrency bookings. For those wanting to take a gamble and bet on the outcome and results of matches, Bitcoin sportsbooks, reputed to be the future of betting, allows players from all over the world, without restriction, to participate regardless of what part of the globe they hail from. Users can make instant and free withdrawals and deposits whenever they want.

US companies Visa and MasterCard have blocked credit card services to some Russian bank customers in the past as a result of U.S. sanctions which have been in force since 2014. As this affects digital payments, it remains to be seen if fans from overseas are able to bypass such difficulties. Although, the Russian hospitality industry has become increasingly welcoming towards digital currencies with the increased customer traffic it is bringing as a result of the event.

The advantage of Bitcoin as a decentralized currency, free for political interference, is that users can make payments wherever they go using the internet. With an increasing number of merchants accepting bitcoin and other digital currencies, tourists to Russia should be able to pay for some goods and services using their digital currencies without too many difficulties.

Russia’s overseas invasion of card-carrying bitcoin users is predicted to expand traffic of the network, should they decide to spend their money using digital currency.

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Intel and Filament Push for a Blockchain IoT Future

Enterprise blockchain developer Filament, which receives significant Intel investment, has released an Internet of Things(IoT)-optimized, USB Blocklet chip.

Filament chief executive Clift-Jennings explained, “Many products, not all, have the ability to connect to USB. These are for manufacturing lines – we have a version of a USB product that plugs into the onboard diagnostics port in vehicles. It’s very much trying to drive toward machines being transactive in nature.”

Blockchain can be used to increase transparency between designers, service providers, and end users, making license management safer, providing production-quality data and becoming resilient against counterfeiting via secure design storage.

Counterfeiting and product integrity

According to BusinessWire, the global total of counterfeited goods has increased to USD 1.2 trillion. Counterfeiting of clothing and textiles primarily affects profits, whereas fraudulent components for machinery, cosmetics, and consumables can have a more detrimental effect by risking health and safety. It is believed that up to 10% of aircraft parts are counterfeit. The outsourcing of services causes difficulty in tracking the source and quality of components, as well as where maintenance is carried out.

The global distribution of manufactured components, must take steps to guarantee the security of plans, and provide data that is tamper-proof and in line with regulations and production standards. This must be achieved while preventing the misuse of plans to manufacture counterfeit goods.

Blockchain IoT shaping the future

Data drives innovation so the ability to share or sell manufacturing data on a ledger could fast track other businesses. Autonomous cars are going to rely heavily on driver data to increase safety in their transition to level 5 (the highest level of autonomy). Having existing hardware produced by IBM or Filament with a variety of companies from Microsoft to Amazon offering blockchain API frameworks, this could quickly accelerate blockchain proof of concept in the industry and change how data is shared an analyzed.

Big companies such as Mastercard are already looking at the applications for blockchain to track goods, providing consumers with product integrity. This could then extend right through to the manufacturing level with the use IoT-optimized hardware.

Intel’s investment in Filament is part of their blockchain initiative for large-scale industrial IoT deployments. The vice president and general manager of Intel, Doug Fisher said, “At Intel, we believe the future of IoT will be enabled by smart, connected, secure edge-devices that drive a data-based economy.”


Image source: Saginaw Future Inc. – CIGNYS Corporation has three advanced manufacturing facilities in Saginaw County.
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