The company’s bigger rival Visa also is making moves into Blockchain, a core cyber security technology in financial services that’s used by the Bitcoin network.
Blockchain technology could cut costs, speed up settlement timelines and reduce credit risk in the trillion-dollar payments space. MasterCard was roughly flat in Tuesday trading.?
The sheer magnitude of the growth potential is staggering: an expected $300 trillion in transactions travel through global correspondent banking networks every year, bringing $150 billion to $200 billion in bank revenues. Blockchain could remove many intermediaries in this blueprint and drive gains exponentially.
Not to be vanquished by Visa, MasterCard is clearly pushing ahead with its distributed ledger technology. The company has added three Blockchain APIs (commands and protocols) to its developer site. In beginner’s terms, a Blockchain is akin to a shared digital database permitting transactions to be recorded and verified electronically over a grid of computers. Importantly, this can be managed without the need of a ledger.
MasterCard’s “open” network decision puts the spotlight on developers beyond banks and retailers, which are now free to enter a core blockchain API, smart contracts API and fast pay network API.
This could simplify and consolidate what MasterCard wants in the peer-to-peer, peer-to-machine and business-to-business payments space.
These strategic movements by MasterCard could initiate a wave of positive expansions and developments:
External/outside developers can accelerate the speed of Blockchain outcomes. Also, MasterCard’s decision to make the network open underlines how some of the largest financial services enterprises are gradually embracing a change in perspective, from viewing bitcoin technology with suspicion to harnessing the superior power of cryptocurrencies’ underlying innovation.
Visa’s Blockchain plans include a company called Chain, which boasts of collaborators in the form of Nasdaq, Fidelity National Financial, Capital One and Citigroup and is one of the many businesses vying for a chance to support banks constructing a ‘permissioned’ blockchain system.