Mastercard takes blockchain mainstream with API
Mastercard has tested and validated its blockchain and will be opening access to it via a set of three APIs published on the Mastercard Developers website.
The APIs include the blockchain core API, the smart contracts API, and the fast pay network API, writes Julie Muhn at Finovate (Banking Technology‘s sister company).
Mastercard will pilot the blockchain for use in the business-to-business space, implementing it to increase speed and transparency in payments and decrease costs for cross-border payments. The blockchain solution aims to offer a new way for consumers, businesses, and banks to transact. The company describes it as the “key” to its strategy of providing payment solutions that “meet every need of financial institutions and their end-customers”.
Mastercard’s blockchain operates independently of a digital currency. As Justin Pinkham, senior vice-president at Mastercard Labs told Forbes, “We are not using a cryptocurrency, and we are not introducing a new cryptocurrency, because that introduces other challenges – regulatory, legal challenges. If you do a payment, then what we can do is move those funds in the way that we do today in fiat currency.”
The company lists four main differentiators of its blockchain:
- Privacy – Mastercard ensures that transaction details are only shared among individuals who are a party to the transaction.
- Flexibility – it can be used in combination with other Mastercard APIs; SDKs are available in six different languages.
- Scalability – it is designed for commercial processing speeds.
- Reach – it is integrated into Mastercard’s payment network, which includes 22,000 financial institutions.
“By combining Mastercard blockchain technology with our settlement network and associated network rules, we have created a solution that is safe, secure, auditable, and easy to scale,” says Ken Moore, executive vice-president of Mastercard Labs. “When it comes to payments, we want to provide choice and flexibility to our partners where they are able to seamlessly use both our existing and new payment rails based on the needs and requirements of their customers.”
The company’s rival Visa has also began working with the blockchain. Last October, the company announced it had teamed up with Chain to launch a blockchain-based B2B payments service called Visa B2B Connect. Neither companies have made firm announcements regarding blockchain use cases for end consumers.