Visa, a financial service company with focus on electronic fund transfers and credit cards, has been putting a lot of effort into the cryptocurrency space. In the past few years, this company was able to secure significant partnerships with some of the biggest crypto companies.
It is worth more than 500 billion dollars and has been an advocate of cryptocurrencies for some time. This is partially why Visa is now one of the crucial linkages between the cryptocurrencies and the traditional financial world. Not long ago, a month ago to be precise, Visa revealed that it had facilitated more than 1 billion dollars in cryptocurrencies in the first 6 months of this year. This all thanks to crypto-linked Visa cards and several partnerships aforementioned (LUTHI, 2021).
“We are doing a lot to create an ecosystem that makes cryptocurrency more usable and more like any other currency.”
These were the words of CFO of Visa, Vasant Prabhu, who also stated that Visa is aware of drawbacks of cryptocurrencies, yet, they are here to provide crypto to those users, who have made a conscious decision to use these assets. Moreover, thanks to the partnership with Circle, an issuer of the stablecoin USD Coin (USDC), Visa is now able to provide even faster and cheaper transactions (MASHAYEKHI , 2021).
Oliver Jenkyn, the vice president of Visa has only recently stated that all the partnerships, sponsorships or collaborations with different FinTechs or cryptocurrencies have one main goal in mind. And that is being an on-ramp and off-ramp for those who want to use cryptocurrencies in the real world. Thanks to this strategy, users of Visa cards can now pay in more than 70 million different stores all around the world, which from the standpoint of adoption, is a massive number (Holland, 2021).
With all the successful collaborations of Visa with cryptocurrency platforms and projects, it might look like there is no space left for Mastercard, its biggest competitor. However, the contrary is the case. Mastercard is doing at least just as fine as Visa when it comes to its presence in the cryptocurrency environs.
Mastercard made a revelation just a few days ago that its Mastercard Start Path, which is a new Fintech incubator. Its role is to find and support FinTech as well as cryptocurrency startups from an early stage. Mastercard has already selected 7 different projects, such as NFT marketplace Mintable, blockchain service provider STACS or investing platform Domain Money. The diversification into different sectors within the cryptocurrency industry itself shows that Mastercard is not willing to put all its eggs into one basket. In fact, Mastercard is rather diversifying its presence in all the different sectors that the crypto world has to offer (Huillet, 2021).
Nonetheless, this year has brought many positives for Mastercard. For instance, it has started to use USDC stablecoin for transactions. Just like Visa, it has also secured a partnership with Circle. Mastercard is also connected more closely with cryptocurrency companies such as Paxos Trust or Gemini, the cryptocurrency exchange of Cameron and Tyler Winklevoss. And yet, the official news of Mastercard facilitating the cryptocurrency transactions was only announced in February. This just shows how fast this world is moving and also highlights why these companies are trying harder than ever to secure important partnerships (DHAMODHARAN, 2021).
When talking about payment providers or financial service providers, we simply cannot overlook PayPal. Even though this company is not a traditional payment provider or card manufacturer, its effect on cryptocurrencies has been at least just as significant as the effect of Visa or Mastercard. Many people even believe that the announcement of PayPal of introducing cryptocurrencies to its users back in October 2020 was the beginning of this bull market (George, 2021).
We cannot really know whether this is the case or not. But what we know is the impact this company has had on cryptocurrencies in the past few months. PayPal has allowed more than 340 million users to buy cryptocurrencies like Bitcoin, Ethereum or Litecoin for as little as 1 dollar.
Important Warning: It is important to note that when you buy cryptocurrencies through PayPal, you do not own them, since you are not able to withdraw them. Even though the CEO of PayPal, Dan Schulman, has previously mentioned that they are planning to allow users to withdraw their cryptocurrencies, until it happens, you do not own cryptocurrencies, only derivatives on PayPal.
Nevertheless, PayPal has seen a tremendous interest in cryptocurrencies from its users. This interest has been so high, that PayPal was forced to increase its limits on buying cryptocurrencies three times. The last increase allows users to buy up to 100,000 dollars worth of crypto per week. This was increased from the previous limit of 20,000 dollars. PayPal has even scrapped its annual purchase limit of 50,000 dollars (Rooney, 2021).
Visa, Mastercard and PayPal have already all also stated that they are intending to be more present in the crypto world. All of them also specified that they are also planning to help governments and central banks with the research, development and implementation of CBDCs. Yet, their main goals in the future are to provide for safe and secure usage of cryptocurrencies in the traditional world.
All of them also want to provide on-ramp and off-ramp services. Thanks to their innovation and strong market position they also want to be at the forefront of the change in the traditional financial world that the cryptocurrencies can bring. With all of these three companies heavily investing in cryptorelated R&D and partnering with different startups, it is clear that they are very pro-cryptocurrency, a sentiment that is likely to continue.
LUTHI, B. (2021, 4 30). Visa Adds Cryptocurrency to Its Settlement Platform. Retrieved from Invest Topedia: https://www.investopedia.com/visa-adds-cryptocurrency-to-its-settlement-platform-5181149
MASHAYEKHI , R. (2021, 7 15). Visa’s embrace of crypto is starting to pay off. Retrieved from Fortune: https://fortune.com/2021/07/15/visa-crypto-payments-fintech-cryptocurrency/
Holland, F. (2021, 7 30). Visa says crypto-linked card usage tops $1 billion in first half of 2021. Retrieved from CNBC: https://www.cnbc.com/2021/07/07/visa-says-crypto-linked-card-usage-tops-1-billion-in-first-half-of-2021.html
Huillet, M. (2021, 7 30). We have to be in the crypto space, Mastercard CEO says. Retrieved from Coin Telegrah: https://cointelegraph.com/news/we-have-to-be-in-the-crypto-space-mastercard-ceo-says
DHAMODHARAN, R. (2021, 2 10). Why Mastercard is bringing crypto onto its network. Retrieved from Master Card: https://www.mastercard.com/news/perspectives/2021/why-mastercard-is-bringing-crypto-onto-our-network/
George, B. (2021, 5 27). PayPal Will Let Customers Withdraw Crypto, Exec Says. Retrieved from Coin Desk: https://www.coindesk.com/paypal-will-let-customers-withdraw-crypto-exec-says
Rooney, K. (2021, 7 15). PayPal increases weekly cryptocurrency purchase limit fivefold to $100,000. Retrieved from CNBC: https://www.cnbc.com/2021/07/15/paypal-ups-weekly-crypto-purchase-limit-fivefold-to-100000-.html