mastercard - Pwim.Net

Libra Association – Visa and MasterCard Have Second Thoughts

Libra has well-known problems. With the US government and other global governments becoming involved in the future of the system. Reporting from the Wall Street Journal, major financial partners including Visa and MasterCard are reconsidering their involvement.

The Libra association has a multi-billion valued network. 28 partners consisting of payment options, marketplaces, telecoms, and non-profit groups.

Visa and MasterCard are a huge part of this network. Any partner leaving during these trying stages would be difficult. A setback for Facebook. Especially if it is a payment giant.

Doubts appearing over the organization have been well documented. Yet this is the first internal sign of trouble. Visa’s director Alfred Kelly said, his company signed an agreement with intent. But, if regulations and compliance are not satisfactory, they would not continue.

Fighting backlash and pressure from the government is difficult. Will mounting internal struggles such as this be the end of Libra?

Facebook’s CEO Mark Zuckerberg continues to be optimistic. As the Libra Association continues to battle internal and external foes. On all fronts.

Facebook claims that regulators and payments will follow the same verification and anti-fraud processes that banks and credit cards use.

Libra project leader David Marcus followed up on social media. ”For Libra to succeed, it needs committed members.” adding pressure to those partners who are having cold feet.

It is not clear if any party will leave. But what is clear, is that this is a potential disaster for the Libra association. If partners do lose interest. Libra is under enough pressure from external factors. With internal problems starting to amount, it has bad indications for the aspiring payments company.

Chief operating officer Sheryl Sandberg may be next to stand before a US committee. Discussing more on Libra and the company direction for digital currency. October 28th being a possible date. This may be a time to help settle internal problems, push forward in US law and be the break they need.

Image via Shutterstock

Mastercard Blockchain to Trace Produce for the Largest American Food Group

Mastercard is collaborating with Envisible, a supply-chain company, to allow the traceability of the origin of food products via Mastercard’s blockchain-based Provenance Solution.

With over 100 blockchain patents filed globally, Mastercard has ranked in the top 3 among top blockchain innovators. Mastercard’s Provenance Solution is industry-agnostic and allows brands to provide record product journeys to contribute to consumer confidence, trust, and awareness. The Provenance Solution also provides governance capabilities for supply chain networks.

Leading US retail food group, Topco Associates LLC will be testing Envisible’s Wholechain traceability system to allow the traceability of produce, meat, and seafood.

Dan Glei, Executive Vice President of Merchandising and Marketing of Food City, under the Topco corporation said: “Using Envisible Wholechain, powered by Mastercard, our grocers will be able to stock shelves with confidence and also be able to pinpoint issues in the food chain during any unfortunate events such as recalls.”

Mark Kaplan, Partner at Envisible, stated that the sheer volume of global trade makes it difficult to ensure the journey and authenticity of the food.

He added: “We’re excited that Mastercard shares our vision and is driving consumer trust by bringing its significant expertise in using technology at scale with commercial-grade processing speeds, data flexibility and privacy, and security standards to an area that has previously been considerably opaque.”

Image via Shutterstock

Mastercard Still Betting on Blockchain Despite Pulling Out from Facebook’s Libra

Mastercard recently pulled out of the Libra Association, along with Visa and PayPal; however, it has been reported that the payment processor is not giving up on blockchain.

On Oct. 30, according to Reuters, Mastercard beat Wall Street’s estimates for quarterly profit during an economic slump and continued to spend more on their credit cards, as the dollar value of transactions processed rose 12.4% to $1.65 trillion in the third quarter of this year.

Despite abandoning development efforts with Libra, Sachin Mehra, the Chief Financial Officer of Mastercard, said that the company would instead develop initiatives on its own. He said:

“We’re very engaged on the blockchain technology. Much like a lot of other companies we believe the technology has the capability to solve a lot of pain points. It still needs to be proven at scale depending on the use case and question.”

Mastercard has recently collaborated with Envisible, a supply-chain company, to allow the traceability of the origin of food products using Mastercard’s blockchain-based Provenance Solution.

Mastercard has ranked in the top 3 among top blockchain innovators globally, with over 100 blockchain patents filed. Mastercard’s Provenance Solution is industry-agnostic and allows brands to provide record product journeys to contribute to consumer confidence, trust, and awareness. The Provenance Solution also provides governance capabilities for supply chain networks.

Image via Shutterstock

Vodafone Follows PayPal and Visa to Leave Facebook's Libra Association

Facebook’s Libra faced another blow as Vodafone announced to have quitted the association.

British telecom conglomerate Vodafone is the eighth founding member to leave the Libra Association, which follows the exit of Stripe, Mastercard, Visa, eBay, Booking Holdings, Mercado Pago, and PayPal in 2019.

Vodafone’s exit is a different story

In June 2019, Facebook announced that it would launch the digital currency in partnership with other members of the association. However, the Libra project quickly faced hurdles imposed by skeptical regulators around the globe.

In October 2019, the Group of Seven (G7) warned cryptocurrencies like Libra can pose a risk to the global financial system, and they formed a task force to examine the issues. The past defecators (payment companies) left because of concerns regarding increased regulatory scrutiny that many US senators pointed out.

Vodafone’s exit is another story. The telecom giant mentioned it intends to focus on developing its own payment service, M-Pesa, further than the six African nations where it is currently available. The company said that it is not burning bridges as it is open for possible “future cooperation” with Facebook.

A Vodafone spokesperson said, “Vodafone Group has made the decision to withdraw from the Libra Association. We have mentioned from the beginning that Vodafone’s focus is to make a genuine contribution to extending financial inclusion. We remain completely committed to the goal and feel we can make the greatest contribution by focusing our efforts on M-Pesa (mobile payments platform).”

Dante Disparte, the head of communications and policy for the Libra Association, mentioned, “The representation of the association members may change over time, but the design model of Libra’s technology and governance ensures that the Libra global payment system would remain resilient.”

What’s next for Facebook Libra?

This is not a disaster for Facebook’s Libra Association. The Libra Association plans to add members later in 2020, with a current waiting list of more than 1,500 companies.

However, this is still not a resounding vote of confidence in Libra’s success. Vodafone thinks that Libra stands a better chance of doing it alone, and the association must work much harder to satisfy other partners to stay onboard as Libra prepares for its anticipated launch.

Initially, the members were expected to run nodes to assist in facilitating transactions on the Libra network and contributing about $10 million to get Libra going. Spotify, Lyft, Coinbase, and Uber, etc. are the initial founding members in the Libra association.

Image via Shutterstock

Mastercard CEO Answers: The Reasons Behind Leaving Facebook’s Libra Association

Mastercard’s CEO, Ajay Banga, stated the reasons behind the company leaving Facebook’s Libra Association in an interview with the Financial Times. Having left the Libra Association in October last year alongside Visa and other firms, the Libra Association has seen eight firms quitting the project.

Banga said,“When you don’t understand how money gets made, it gets made in ways you don’t like.” He added that the social media giant’s data integrity was also another reason behind quitting the project.

The CEO does not understand the stablecoin project’s business model. At the same time, the need for a proprietary digital wallet made it clear that the project may not have positioned itself as a financial inclusion tool, as it was initially stated to be.

Banga also had concerns about the Libra Association’s members to adhere to compliance measures, including anti-money laundering and know-your-customer regulations.

Mastercard beat Wall Street’s estimates in quarterly profit during an economic slump in October last year. Despite abandoning development efforts with Libra, Sachin Mehra, the Chief Financial Officer of Mastercard, said that the company would instead develop initiatives on its own. He added, “We’re very engaged on the blockchain technology. Much like a lot of other companies, we believe the technology has the capability to solve a lot of pain points. It still needs to be proven at scale depending on the use case and question.”

Image via Shutterstock

Facebook Moving Further Away From Libra, But Considering its Own Digital Token System

Libra, the cryptocurrency project by social media giant Facebook has been withstanding regulatory backlash and pressure from the government since its announcement in June 2019.

Facebook is now considering developing a system of digital tokens, pegged to different government-issued currencies including the US dollar and the euro. The new plan will still include Libra, although Libra Association, separately, will continue its work on the stablecoin pegged to a basket of global currencies.

Facebook previously told US senators that the initial group of currencies that Libra will be likely backed by the US dollar, Euro, Yen, British Pound, and the Singapore dollar. Virginia Democratic Senator Mark Warner warned Facebook that China may try to push the Libra Association to include the yuan in the stablecoin, Libra. Senator Warner mentioned that China has been encouraging other governments to include its currency in their reserve holdings, and asked Facebook to commit to excluding it from the list of currencies backing Libra.

When the Libra Association was launched, participating members included Mastercard, Paypal, Visa, Stripe, although these members have currently left the association.

Dante Disparte, Head of Policy and Communications at the Libra Association said, “The Libra Association has not altered its goal of building a regulatory compliant global payment network, and the basic design principles that support that goal have not been changed nor has the potential for this network to foster future innovation.

What’s going on with Calibra?

As Libra Association was created as a non-profit, and Calibra, was created as Facebook’s subsidiary, and would only represent one member.

According to The Information report, Facebook is also planning to delay the launch of Calibra, which was intended to be the digital wallet for the cryptocurrency Libra. Calibra’s technology could enable smartphone users to store and use the cryptocurrency and pay for products with it. The digital wallet will be supporting multiple currencies, including Libra, and its launch will be pushed from this summer to October of this year.

The report also suggested that the availability of the wallet after its launch will be restricted to the jurisdictions of the government-backed currencies.

G7 reports Libra may threaten financial security

The G7 group of nations has drafted a report outlining nine major risks that digital currencies, such as Facebook’s proposed Libra, pose to the global financial system.

As Blockchain.News previously reported, the G7 report stipulated that even if member firms of the governing Libra Association properly addressed regulatory concerns, it may well not be approved by the necessary regulators. From the report, “The G7 believes that no stablecoin project should begin operation until the legal, regulatory and oversight challenges and risks are adequately addressed.”

The backlash from Mastercard CEO

Banga said, “When you don’t understand how money gets made, it gets made in ways you don’t like.” He added that the social media giant’s data integrity was also another reason behind quitting the project.

Banga also had concerns about the Libra Association’s members to adhere to compliance measures, including anti-money laundering and know-your-customer regulations.

Image via Shutterstock

Credit Giant MasterCard Grants Wirex First Principal Membership License

Wirex has become the first native cryptocurrency platform to be granted a principal membership license from credit card giant Mastercard as part of its accelerated expansion into digital assets and its outreach to other crypto card providers seeking to enter the market.

According to a release shared with Blockchain.News, Mastercard today announced the expansion of its cryptocurrency ‘Accelerate’ program, which extends an invitation to cryptocurrency and crypto card partners from emerging brands and fintechs.

The move comes as Wirex becomes the first native cryptocurrency platform to be granted a Mastercard principal membership, allowing it to directly issue payment cards.

Mastercard’s Crypto Mission

Mastercard has committed to applying its innovation, experience and scale to emerging cryptocurrency and digital currency partners, building global ecosystems to modernize payments and transform the way people and businesses transact.

According to recent research from Statista, consumer interest and investment in digital currencies are growing, with data showing that up to 20 percent of the population of some countries are holding cryptocurrencies, and an increasing number of merchants, digital players, and financial institutions are exploring crypto payments.

“The cryptocurrency market continues to mature, and Mastercard is driving it forward, creating safe and secure experiences from consumers and businesses in today’s digital economy,” said Raj Dhamodharan, Executive Vice President, Digital Assets and Blockchain Partnerships, Mastercard. “Our work with Wirex and the wider crypto ecosystem is accelerating innovation and empowering consumers with more choice in the way they pay.”

What Does Principal Membership Mean for Wirex

Being granted Mastercard principal membership enables Wirex to issue payment cards directly to consumers, which will make it easier for mainstream consumers to buy, hold and exchange multiple traditional and cryptocurrencies. Consumers can instantly convert their cryptocurrencies into traditional fiat currency, which can be spent everywhere Mastercard is accepted around the world.

Although currency may only enter Mastercard’s network as traditional fiat currency, users will be able to benefit from Wirex’s Cryptoback rewards program, which automatically gives customers up to 1.5% in Bitcoin for every purchase made on the card.

Pavel Matveev, CEO and co-founder of Wirex said, “We are very excited for Wirex to be the first crypto-native company granted principal membership from Mastercard.” Matveev stated that the license granted to Wirex represents a growing interest and recognition in the acceptance of cryptocurrency by leading bodies and regulators and believes that it will help create a world where all currencies, “traditional and crypto, are equal.”

Regulated by the UK’s Financial Conduct Authority with a license to issue cards in Europe, Wirex has been growing rapidly over the past 18 months, with a successful expansion into the Asia Pacific region and the release of its native Wirex Token (WXT).

Visa Joins Mastercard and PayPal in Turning Bullish for Crypto and Digital Currencies

Shortly after Mastercard showed its hand on its stance on cryptocurrency, Visa published a blog announcing that the payments giant is advancing its approach towards digital currency. PayPal was recently rumored to have partnered with Paxos to provide crypto trading services.

Visa described three values that will evolve its digital currency strategy, including the maintenance of robust data protection standards; remaining network and currency agnostic; and partnering with projects that align with Visa’s existing expertise.

Visa has been working with the World Economic Forum to collaborate on a set of policy recommendations for central banks that are exploring central bank digital currencies (CBDC). The blog post read:

“As part of this public sector strategy, Visa has been engaging with policymakers and global organizations to help shape the dialogue and understanding of digital currencies; this includes our work with the World Economic Forum and our collaboration on a set of policy recommendations for central banks exploring the concept of Central Bank Digital Currency (CBDC).”

The payment giant added that the firm has been working with leading companies and the public sector, to settle concerns from policy leaders and regulators on a range of issues on cryptocurrencies, including consumer protection and payments resilience.

Coinbase and Fold have also been working with Visa, for bridging cryptocurrencies with Visa’s 61 million merchants. Visa further teased that there may be new digital currency projects to come:

“We believe that digital currencies have the potential to extend the value of digital payments to a greater number of people and places. As such, we want to help shape and support the role they play in the future of money. We look forward to sharing more with you on this work in the months that follow.”

Mastercard grants first crypto principal membership license

In the same week, Mastercard has granted crypto-friendly payment platform Wirex a principal membership license to enable the issuance of payment cards.

Mastercard announced the expansion of its cryptocurrency ‘Accelerate’ program, which extends an invitation to cryptocurrency and crypto card partners from emerging brands and FinTechs.

Being granted Mastercard principal membership enables Wirex to issue payment cards directly to consumers, which will make it easier for mainstream consumers to buy, hold and exchange multiple traditional and cryptocurrencies. Consumers can instantly convert their cryptocurrencies into traditional fiat currency, which can be spent everywhere Mastercard is accepted around the world.

Visa applied for a blockchain-based digital currency patent

Visa applied for a new patent application to create a blockchain-based digital currency on a centralized computer, according to a publication by the US Patent and Trademark Office (USPTO), originally filed in November 2019.

The patent was described as “Digital Fiat Currency.” The US dollar was mentioned as one of the fiat currencies to be used potentially, although the patent could also apply to other central bank digital currencies including the pound, yen, and the euro.

Filed by Simon J. Hurry and Alexander Pierre with the Visa International Service Association, the application noted that Ethereum could be used as a possible network for the digital currency.

MasterCard Asia Files Device Billing System Patent Compatible With Iota’s Tangle Network

MasterCard Asia has filed a patent for a device billing system that aims to help shared device users and merchants avoid fees associated with legacy payment systems of maker spaces. The patent file specifically mentions compatibility with Iota’s (MIOTA) Tangle distributed network.

MasterCard Asia, the payment giant’s Singapore-based subsidiary recently filed a patent with the US Patent Office for a payment system for shared hardware devices that aims to eliminate unnecessary fees for users and merchants.

As outlined by the patent published on Aug 20, the billing system is a proposal for a pay-as-you-go system based on the Tangle network. Citing copiers and 3D printers as examples—the paten outlines that using the system merchants and users only have to provide their credentials to access a hardware device and through transparent “data storage and aggregation” the user is billed only for what they have used.

The patent states that legacy systems and traditional payment methods often leave users of “maker spaces”—businesses that operate by making uncommon or expensive hardware available—being forced to pay a flat membership fee despite their intended use. Additionally, typical forms of pay-per-use schemes often only accept “physical currency to operate” and pre-paid services also lock users into standard amounts that they may not necessarily need.

MasterCard’s proposed billing system concept would create a higher degree of transparency and trust, as well as the ability to monitor usage in real-time while eliminating associated extra fees of credit cards and traditional payment systems.

According to the patent, the proposed data storage systems are compatible with the Tangle network but could be used by a generic blockchain—the filing makes no direct mention of Iota network or, Miota token. However, as the transactions are recorded on distributed ledger technology (DLT) it is likely that some cryptocurrency or tokens will be leveraged.

MasterCard’s Crypto Mission

Mastercard has committed to applying its innovation, experience, and scale to emerging cryptocurrency and digital currency partners, building global ecosystems to modernize payments and transform the way people and businesses transact.

As reported by Blockchain.News in July, MasterCard recently granted Wirex a principal licensing membership, making it the first native cryptocurrency platform to allowed to directly issue payment cards.

According to recent research from Statista, consumer interest and investment in digital currencies are growing, with data showing that up to 20 percent of the population of some countries are holding cryptocurrencies, and an increasing number of merchants, digital players, and financial institutions are exploring crypto payments.

Mastercard Launches Virtual Platform to Help Governments Test CBDCs

Payments giant Mastercard has unveiled a virtual platform that will enable central banks to assess and experiment with Central Bank Digital Currencies (CBDCs).

Per the announcement, the Mastercard virtual testing platform is an innovative virtual and custom testing platform that will allow central banks to evaluate use cases and test roll-out strategies for CBDCs by simulating a CBDC ecosystem. As the announcement detailed, the platform will enable the simulation of issuance, distribution, and exchange of CBDCs between banks, financial service providers, as well as consumers.

As a multinational firm whose business offering revolves around payments and remittances, Mastercard noted that it seeks to partner with the public sector, banks, and stakeholders in the payment ecosystem to collectively explore CBDCs.

Mastercard’s Raj Dhamodharan, Executive Vice President, Digital Asset, and Blockchain Products and Partnerships noted:

“Central banks have accelerated their exploration of digital currencies with a variety of objectives, from fostering financial inclusion to modernizing the payments ecosystem. Mastercard is driving innovation with the public sector, banks, fintech, and advisory firms in the exploration of CBDCs, working with partners that are aligned to our core values and principles. This new platform supports central banks as they make decisions now and in the future about the path forward for local and regional economies.”

Private Sector Role is Crucial in CBDC Development

The involvement of private businesses is crucial in the development and subsequent deployment of Central Bank Digital Currencies. As Blockchain.news reported back in April, private entities including MacDonald’s, and Coffee giant Starbucks were among the first to try out China’s DCEP system in the new district of Xiong’An.

Sheila Warren, Head of Blockchain, Digital Assets and Data Policy at the World Economic Forum made a case for public-private partnership in CBDC development. She said:

“Collaborations between the public and private sectors in the exploration of Central Bank Digital Currencies can help central banks better understand the range of technology possibilities and capabilities available with respect to CBDCs. Central banks can benefit from support in exploring the option set available to them with respect to CBDCs, as well as gaining insight into what opportunities may be forthcoming.”