Coindesk Logo

How Payment Giants Are Embracing Bitcoin and Blockchain Tech

How Payment Giants Are Embracing Bitcoin and Blockchain Tech

How Payment Giants Are Embracing Bitcoin and Blockchain Tech

Here's a round-up of some of the most notable interactions between payment giants and the world of crypto.

Here's a round-up of some of the most notable interactions between payment giants and the world of crypto.

Here's a round-up of some of the most notable interactions between payment giants and the world of crypto.

AccessTimeIconOct 29, 2015, 2:25 PM
Updated Aug 18, 2021, 4:19 PM

Presented By Icon

Election 2024 coverage presented by

Stand with crypto

MasterCard's participation in Digital Currency Group's undisclosed funding round sent ripples of excitement across the crypto-sphere earlier this week.

While this is MasterCard's first crypto-related investment, the multinational corporation is not the first mainstream finance company to dip its toe in the bitcoin and blockchain technology pool.

Banks have publicly embraced blockchain technology and prominent figures from traditional finance have also lauded its potential. But how exactly are payment giants such as MasterCard interacting with the world of crypto?

Be it through direct investment, partnerships with companies in the space or public comments on bitcoin and its underlying technology, here's a round-up of some of the most notable interactions between payment giants and the world of crypto.

1. MasterCard

MasterCard

Founded: 1966

Company type: Public

Company size: Over 10,000 employees.

Reported revenue: $2.4 net revenue for the fourth quarter of 2014 – a 14% increase versus the same period in 2013.

American payments giant MasterCard was one of 11 investors in Barry Silbert's Digital Currency Group's (DCG) new undisclosed funding round.

The news came months after the multinational corporation claimed the risks presented by digital currencies far outweighed the benefits in its submission to the UK Treasury's call for information on digital currencies, last November.

Matthew Driver, MasterCard's president for South East Asia was also critical of digital currencies in December 2014, following the company line that cryptocurrencies presented too many risks.

 MasterCard was "not completely comfortable with the idea of cryptocurrencies", adding that the technology was "against the whole principle" on which the credit card giant had established its business.

Reports surfaced that MasterCard had spoken out against bitcoin's perceived risks, calling for regulators to create a "level playing field" for payments systems:

"It is our view that all participants in the payments system that provide similar services to consumers should be regulated in the same way to achieve a level playing field for all. Moreover, any regulations should be technology neutral to ensure that they can and do apply to all new providers of payment services to consumers, especially with advancements in technology."

MasterCard filed a patent application to be able to incorporate bitcoin into the design of a proposed online shopping cart which would be rolled out to its global customers. Despite this, MasterCard insisted the filing should not be perceived as the company's support of bitcoin.

2. Visa

Founded: 1958

Company type: Public

Company size: between 5,001 and 10,000 employees

Reported revenue: GAAP net income in the fiscal fourth quarter of 2014 was $1.1bn, a decrease of 10% over the prior year.

Like MasterCard, Visa has also invested in the crypto space, contributing to blockchain startup Chain's $30m funding round.

Earlier this week, Visa revealed a new proof-of-concept that leverages bitcoin's blockchain for record keeping.

Debuted at Money 20/20 in Las Vegas, the project sets out to digitise the car rental process, using bitcoin transactions to create a digital fingerprint for each vehicle on the blockchain. Visa is involved in the project through its technology innovation arm.

Unlike MasterCard, which has been generally dismissive about digital currencies, some Visa executives have spoken positively about bitcoin and its blockchain in the past.

, Jonathan Vaux, executive director of new digital payments and strategy at Visa Europe, said:

“The one thing I often get asked about is bitcoin. I do see … a separation between the currency and the technology that sits under it. From the point of view of currency, I think that's interesting. As Visa, that's what we do – we manage currencies.”

Visa CEO Charlie Scharf spoke about bitcoin in January last year. "There are certainly some interesting things about bitcoin and other things like it, but there are also a great deal of complexities," he said.

Schartf went on to suggest that Visa was not actively monitoring the bitcoin space: "We feel quite comfortable with the business we have here."

3. American Express

AmEx

Founded: 1850 

Company type: Public

Reported revenue: American Express earned a record $5.9bn in net income in 2014, up 10% from the prior year.

' VC arm invested in bitcoin-to-cash app Abra as part of its recent $12m Series A round.

Speaking to CoinDesk, AmEx Ventures managing partner Harshul Sanghi said it was too soon to know how the company may leverage blockchain technology.

"Let's see what currencies are important and we'll transact in the currencies that our customers want to transact in," he said, adding that the company was paying closer attention to possible blockchain technology applications:

"As we watch the digital currency industry develop, we have seen that blockchain technology and the distributed ledger can play an important role in shaping the future."

Sanghi's remarks come after the company's CEO Kenneth Chenault spoke about digital currencies in December last year.

Similar to his contemporaries, Chenault said he saw more potential for bitcoin's underlying blockchain technology than the digital currency itself.

“The protocol of bitcoin is going to be important," he said.

4. PayPal

PayPal

Founded: 1998

Company type: Public

Company size: Over 10,000 employees

Reported revenue: $8bn in 2o14.

Online payments leader PayPal announced its first partnerships in the bitcoin space in September 2014.

At the time, the company's senior director of corporate strategy Scott Ellison, said the company was "proceeding gradually, supporting bitcoin in some ways today and holding off on other ways until we see how things develop".

Bitcoin payment processors BitPay, GoCoin and Coinbase told CoinDesk the partnership had been months in the making.

Rumours of a possible bitcoin-related partnership first surfaced at the beginning of September 2014, after the company released a new promotional video which mentioned bitcoin.

Earlier that year, John Donahoe – CEO of PayPal at the time – hinted at possible bitcoin integration. In an interview with CNBC, the former CEO said:

"I think there's no doubt digital currency is going to play an important role going forward, and at PayPal, we're going to have to integrate digital currencies into our wallet."

 also held an introductory bitcoin event as part of a monthly speaker series in January 2015.

Featured image via Shutterstock.

Disclosure

Please note that our privacy policy, terms of use, cookies, and do not sell my personal information have been updated.

CoinDesk is an award-winning media outlet that covers the cryptocurrency industry. Its journalists abide by a strict set of editorial policies. CoinDesk has adopted a set of principles aimed at ensuring the integrity, editorial independence and freedom from bias of its publications. CoinDesk is part of the Bullish group, which owns and invests in digital asset businesses and digital assets. CoinDesk employees, including journalists, may receive Bullish group equity-based compensation. Bullish was incubated by technology investor Block.one.


Learn more about Consensus 2024, CoinDesk's longest-running and most influential event that brings together all sides of crypto, blockchain and Web3. Head to consensus.coindesk.com to register and buy your pass now.