Visa, Mastercard Pause Crypto Services Launch

US payment goliaths Visa and Mastercard are pausing the launch of certain crypto-based services and products in the wake of numerous high-profile collapses in the crypto industry, such as FTX and BlockFi.

The bankruptcies/shortcomings of several major players in the industry, current market conditions, and increased regulatory scrutiny have led Visa and Mastercard to change their plans with immediate effect.

Why have Visa, Mastercard pushed back the launch of crypto services and products?

Over the past few years, card giants such as Visa and Mastercard explored partnerships with leading crypto firms. They set up dedicated teams to survey and potentially integrate blockchain technology into their products and services.

In April 2022, Mastercard and Nexo teamed up to launch the world’s first crypto-backed payment card.

In October 2022, Visa announced global debit card agreements with disgraced cryptocurrency exchange FTX as part of an expanded partnership. Following the downfall of the crypto trading platform a few weeks later, Visa terminated the partnership in November.

In 2021, American Express said it would consider using cryptocurrency to redeem reward points.

An unnamed American Express spokesperson said that while the organisation continues to explore the significant use cases of blockchain technology, crypto will not replace their "core payment and lending services", "in the near term".

While Visa and Mastercard have put a halt to crypto service and product rollout at the time of writing, they are optimistic about the future of blockchain technology. Their cryptocurrency-centric strategy and focus remain unchanged.

In a conversation with Reuters, a Visa spokesperson said the high-profile failures seen recently in the sector act as "an important reminder" that there is a long way to go before cryptocurrency is "part of mainstream payments and financial services".

Talking to Reuters, a Mastercard spokesperson commented on how the company intends to continue to apply blockchain technology to “build more efficient systems” that “help address current pain points”. It should be noted that the delayed launch of cryptocurrency services and products by massive payment corporations like Visa, Mastercard, and American Express and the halt on the forging of new partnerships is not a poor reflection of blockchain technology. Instead, it is a sign of the times.

With global crypto regulatory frameworks being built as we speak, it makes the utmost sense to explore blockchain technology further and play the waiting game while the market settles and consumer/investor confidence rebuilds itself.