Mastercard has created a new way for its customers to buy cryptocurrencies. In partnership with Chainlink Mastercard has developed Swapper Finance, a platform enabling cardholders to easily and securely purchase digital assets.
This is an iterative step in the growing maturity of the cryptocurrency sector. Several major card issuers, including Mastercard and Visa, we well as crypto platforms, already enable cryptocurrency-based payments through debit, credit or prepaid cards.
Others, however, continue to prevent crypto payments. UK credit card company Barclaycard, for example, has said it will not allow crypto payments, both because of price volatility and because the payments are not covered by any UK consumer protection.
Decentralized platforms
The new Mastercard solution allows people to buy cryptocurrencies on decentralized platform Uniswap, bringing similar ease of use as crypto exchanges such as Coinbase and Kraken.
“We’re meaningfully accelerating the broader adoption of digital assets at scale”, said Raj Dhamodharan, executive vice president, Blockchain & Digital Assets at Mastercard. “[We are] enabling billions of people to participate in the crypto economy with the cards in their wallets today.”
Decentralized platforms are typically used by tech-savvy crypto traders and Decentralized Finance (DeFi) experts, who appreciate the lower fees and anonymity.
Hidden complexity
Mastercard is working on the initiative with other companies, notably Chainlink, which connects existing systems to any public or private blockchain, enabling secure cross-chain communication.
The process has several steps behind the scenes, with the consumer only seeing the first and last stages:
- Consumers use the Swapper Finance platform, either directly or through a linked app, to initiate a crypto purchase
- Shift4 then submits the payment request to Mastercard and processes the real-time fiat-to-crypto conversion upon approval.
- zerohash delivers the intermediary crypto token, such as a stablecoin, from the fiat conversion to Swapper smart contracts
- Chainlink validates the purchase against the user’s original request, then transmits the order instructions to Swapper’s smart contracts in a decentralized manner
- Swapper smart contracts securely execute a token swap
- The consumer receives the desired token in their wallet
