Mastercard partners with R3, a leading enterprise blockchain software provider, to develop a blockchain based solution for overseas payments

United States: Global payments and technology leader, Mastercard entered into an agreement with the blockchain firm, R3 to develop a new blockchain based solution for making overseas payments. This new payment platform will focus on connecting faster payment infrastructures, schemes and banks, globally. In this pilot project, Mastercard will be acting as the network operator and will be responsible for processing, settling and clearing international payments. R3 will connect its open source blockchain platform Corda that includes financial services firms, technological companies, banks, regulators and trade associations with Mastercard’s ecosystem. This partnership will provide new, innovative, value added services to customers and will address the issues such as high processing overheads, liquidity management and the existing lack of standardization and processes between banks and domestic clearing systems.

Vice President (New Payment Platforms) of Mastercard stated that, “Developing a new and better cross-border B2B payments solution by improving worldwide connectivity in the account-to-account space is central to Mastercard’s ambition. Our goal is to deliver global payment infrastructure choice and connectivity as demonstrated through our recent strategic acquisitions and partnerships, including our relationship with R3.”

CEO of R3 further said that, “All institutions be it a large or a small one relies on the ability to send and receive payments, but the technology they rely upon is cumbersome and expensive. Cross-border payments can be a pain point. Corda was designed specifically for enterprise use cases such as this, and the company looks forward towards supporting Mastercard in bringing blockchain-enabled payments businesses across the globe.”

According to TechSci Research, Mastercard has been looking for opportunities to strengthen its cross-border business. Mastercard recently acquired Transfast, an international money transfer and cross-border payments company, to increase its worldwide connectivity in the account-to-account space. Mastercard, earlier in this month also joined the Marco Polo Network to advance its global trade through optimized financing. The main aim of this partnership with R3 is to address the global cross border payments processing issues. With this partnership, blockchain will help in bringing about the much-needed transformation in the cross-border payment industry in the form of its transparency, immutability, and security. Smart contracts running on blockchain networks can automate contract administration.

There is a lot happening across cross border payments, with large players exploring blockchain technology for efficiently facilitating international payments. For instance, the biggest competitor of Mastercard, Visa announced the Visa B2B Connect network, which will help enterprises make inexpensive international transfers.

According to the published report by TechSci Research, “Global Blockchain Market By Type (Private, Public, & Hybrid), By Application (Financial Vs. Non-Financial), By Enterprise (Large Vs. Small), By End User (BFSI, Corporate, Government, and Others), Competition Forecast & Opportunities, 2012 – 2022”, the global blockchain market stood at around $ 215 million in 2016, and is forecast to grow at a robust CAGR of more than 43% to reach $ 4.2 billion by 2022, on account of widespread implementation across numerous areas such as Internet of Things (IoT), banking & financial institutions, healthcare, media & entertainment, energy, retail, etc. In addition, rapid increase in FinTech spending, predominantly on technologies used in the financial services sector, is expected further propel market growth in the foreseeable future.

According to the published report by TechSci Research, “Global Blockchain Supplychain Market By Type (Public Blockchain, Private Blockchain & Consortium Blockchain), By Provider (Application & Solution Provider, Middleware Provider and Infrastructure & Protocols Provider), By Application, By End User Industry, By Region, Competition, Forecast & Opportunities, 2024”, the global blockchain supply chain market was valued at $ 85.7 million in 2018 and is projected to grow at a CAGR of 80.4% to reach $ 2,674.9 million by 2024, on account of growing demand for transparency of the supply chain. Owing to globalization and rising internet penetration, enterprises and customers do not have clear visibility of all the members present in management. Blockchain disruption in supply chain management can solve the problem of lack of transparency and accountability. Blockchain is a decentralized network that works without a single authority and records information such that the information can be viewed by its members but can’t be altered, once it is recorded in the system.