The cryptocurrency journey of the payment giant

“The world’s leading payment giants are actively deploying in the cryptocurrency market. Visa has been deploying cryptocurrencies since 2015. In the first half of 2021, cryptocurrency-related Visa card consumption activities exceeded US$1 billion; MasterCard’s cryptocurrency journey began in 2020 In 2015, it was recently announced that it would support stable currency settlement in its system; although PayPal was not optimistic about cryptocurrencies at first, it was also actively deploying cryptocurrencies; Square was a complete cryptocurrency supporter, and even tried to influence policies to make more cryptocurrencies more effective. friendly.”

On July 16, 2021, Square CEO Jack Dorsey stated on Twitter that Square will open a new business to develop Bitcoin hardware wallets that will allow customers to better store Bitcoin. After this tweet was released, Square’s stock price rose 2.7%, and rose 1% at the close of the day.

The cryptocurrency journey of the payment giant

Source: Twitter

The payment giant Square is actively deploying cryptocurrency-related businesses, which also gives cryptocurrency supporters a lot of expectations for the future and applications of cryptocurrency. Cryptocurrency has become a battleground for payment giants. In addition to Sqaure, Visa, Mastercard, and PayPal are also actively deploying the cryptocurrency field, hoping to eat the dividends of the early rapid development of cryptocurrency.

Visa at the forefront of cryptocurrency payments

Visa’s layout in the blockchain field began in 2015. In 2015, Visa invested USD 30 million in blockchain startup Chain; on October 25, 2016, Visa and Chain cooperated to launch an international B2B payment solution based on blockchain technology, which was officially launched in 2019.

“Now is the best time for global companies to improve their business operations through new payment technologies ,” said Jim McCarthy, executive vice president of Visa’s innovation and strategic partnerships. “We are developing new solutions for our financial Institutional partners provide efficient and transparent global payment methods.”

On March 30, 2021, Visa announced the launch of a cryptocurrency service with crypto payment platform Crypto.com, allowing the use of the stable currency USDC in its payment network. Affected by this news, Bitcoin surpassed $1,000 for a short time, to above $57,000.

Bitcoin Minute Line Chart

The cryptocurrency journey of the payment giant

Source: TradingView

In recent years, Visa has established cooperative relationships with 50 companies including Coinbase, Circle and FTX. Allow users to easily use cryptocurrency on the Visa payment network. This means that even in those merchants that do not accept cryptocurrency, users can smoothly use the relevant payment services provided by Visa.

Visa said: The new cooperation allows its customers to easily convert and use cryptocurrency at 70 million merchants worldwide. Cuy Sheffield, head of Visa’s cryptocurrency business, said in an interview with Business Insider: “Merchants don’t need to make any changes, and related transactions are no different from other Visa businesses. Everything is done on the backend, and the cardholder Of crypto assets will be instantly converted into specific legal tender. As more and more consumers own crypto assets, the demand for transactions will naturally arise. At the same time, we must consider that millions of merchants The currency is not familiar, and there are no plans to update consumer terminals.”

The scale of debit and credit card transactions processed by Visa in 2020 is close to 11.4 trillion U.S. dollars, while the scale of cryptocurrency-related businesses is still insignificant. However, the value of this platform far exceeds the commission that Visa generates through cryptocurrency-linked bank cards; if the scope of cryptocurrency applications continues to expand in the future, the company will definitely benefit from it.

Visa’s goal is to make it easier for users to use cryptocurrencies to purchase goods and services on these platforms, while at the same time opening up new revenue channels for Visa through transactions related to this ever-increasing asset class. So far, Visa’s investment in the cryptocurrency field is paying off.

On July 8, Visa announced that in the first half of 2021, the company’s cryptocurrency-related Visa card spending exceeded $1 billion. In the future, like other elements of the financial technology revolution, cryptocurrency will become an important part of Visa’s overall digital strategy, and its importance will increase day by day. Kuy Sheffield, the head of Visa’s cryptocurrency business, told The Block in an interview that in the first four months, the number of Visa’s cryptocurrency company partners has increased by 40%.

Mastercard, a giant in the cryptocurrency layout

On July 30, 2020, the world’s leading payment technology company Mastercard announced two latest initiatives in the cryptocurrency field, namely: allowing cryptocurrency companies to join its system to issue cards and launching cryptocurrency cooperation projects.

Mastercard has expanded its cryptocurrency program to make it easier for companies in the field to issue their own payment cards. The company has signed an agreement with Wirex to make the London-based startup the first “native” cryptocurrency platform to receive a principal membership. This actually means that Wirex can now issue cards directly on Mastercard’s network.

Raj Dhamodharan, Mastercard’s executive vice president responsible for digital assets and blockchain products and partnerships, said: “The cryptocurrency market continues to mature, and Mastercard is pushing it forward to create security for consumers and businesses in today’s digital economy. A reliable experience. Our collaboration with Wirex and the broader encryption ecosystem is accelerating innovation and giving consumers more choices in payment methods.”

However, it is worth noting that cryptocurrency payment cards are not new. Earlier, Coinbase launched its own card in cooperation with Visa, MasterCard’s main competitor. Wirex, established in 2014, also announced a partnership with Visa to issue payment cards in its payment system before the announcement of MasterCard.

In addition, Mastercard is also accelerating the promotion of its cryptocurrency cooperation projects, and sincerely invites partners in the cryptocurrency field to join the Mastercard “Accelerate” program to promote the wider application of cryptocurrencies and more cutting-edge innovations, and effectively empower industry partners to launch easily and quickly A secure and compliant payment card.

Companies that join the program can quickly integrate into the Mastercard system within a few weeks, obtain tailor-made business guidance and establish direct contact with relevant business departments of Mastercard. By integrating Mastercard’s leading technology and using its industry insights and network security services, participating companies are also expected to quickly gain results in areas such as customer acquisition and expansion of emerging market segments. In addition, Mastercard will also focus on inclusive finance, use the power of the Accelerate program to promote the research and development of key products, and join hands with enterprises to create solutions to improve economic inclusiveness.

Raj Dhamodharan, Executive Vice President of Mastercard Digital Assets and Blockchain Products and Partnerships, said: “To ensure the continued development of the cryptocurrency industry, Mastercard has made long-term and unremitting efforts. In response to the current trend of digital economy development, we aim to fully Unleash the application potential of cryptocurrency and create a safer and more reliable payment experience for consumers and enterprises. In addition, our close cooperation with Wirex and the wider ecosystem will also accelerate industry innovation, especially in payment methods. Consumers have more diversified choices.”

On September 11, 2020, Mastercard announced the launch of a dedicated virtual test platform to better serve global central banks (central banks) for testing and research on central bank issuance of digital currencies (CBDCs). The platform can effectively simulate the issuance of CBDCs and their circulation and transactions among banks, financial institutions and consumers. Mastercard invites global central banks, commercial banks, and technology and consulting institutions to join the test platform to jointly conduct evaluation and discussion on the design, use, and interconnection of CBDCs.

Raj Dhamodharan, Executive Vice President of Mastercard Digital Assets and Blockchain Products and Partnerships said: “Mastercard actively collaborates with government departments, banks and various institutions to promote innovative research on CBDCs. At the same time, we are also committed to upholding common values ​​and principles. Partners from all walks of life maintain close cooperation, hoping that this new platform can continue to help central banks of various countries make the most beneficial decisions in response to the specific requirements of local and regional economic development.”

MasterCard, the credit card giant, announced in its blog in 2021 that it will “start directly supporting selected cryptocurrencies on our payment network” from 2021. Although MasterCard has already cooperated with the cryptocurrency payment company Wirex on encrypted debit cards, the company has not directly contacted cryptocurrencies, but this news represents a change in attitude that allows cryptocurrencies to be used in its transfer network. Realize the transfer.

MasterCard also wrote in its blog post: “In the past, our cryptocurrency partners converted their end digital assets into traditional currencies, and then transferred them to the MasterCard network. Now, we will directly support the transformation of digital assets to make more Many merchants can accept cryptocurrency payments, but this ability is currently limited by the transfer method unique to each digital asset. Our transformation also needs to eliminate inefficiencies, so that consumers and merchants do not have to be traditional when making purchases Back and forth between currency and cryptocurrency.”

Which cryptocurrencies will MasterCard support? MasterCard stated that it is looking for “encrypted assets that provide reliability and security.” For example, stablecoins-a type of cryptocurrency designed to maintain the value of its assets relative to the U.S. dollar so that it can be better used for payment.

As retail and institutional investors gradually use stablecoins as payment methods, the issuance of stablecoins such as Tether and USDC has surged. So far, the market value of Tether has reached 62.56 billion U.S. dollars, and the market value of USDC, the second-ranked stable currency in market share, has also reached 21 billion U.S. dollars.

The market value of stablecoins has grown steadily

The cryptocurrency journey of the payment giant

Source: The Block

Top 5 stablecoins by market capitalization

The cryptocurrency journey of the payment giant

Source: Coincodex

PayPal goes round and round and finally embraces cryptocurrency

PayPal’s cryptocurrency journey began in 2014. In August 2014, PayPal acquired Braintree and began to provide limited support for Bitcoin. Braintree is a Chicago-based company that specializes in providing mobile and online payment systems for e-commerce companies. Braintree also accepts Bitcoin payments and transactions. Users can open an account with Coinbase and then link the new account to Braintree.

In the following September, PayPal announced that it would cooperate with BitPay, GoCoin and Coinbase to accept Bitcoin payments. However, PayPal officially stated that PayPal will not process transactions on its own and does not recognize Bitcoin as a currency. However, within a year, PayPal cut off the business related to cryptocurrency and froze any accounts related to cryptocurrency, interrupting the journey of cryptocurrency.

In March 2017, Bill Harris, then PayPal CEO, relentlessly pointed out that “Bitcoin is useless as a payment mechanism and ridiculous as a store of value”. Dan Schulman, the current CEO of PayPal, has also repeatedly “slammed” Bitcoin in public.

When the time comes to 2018, PayPal’s attitude towards blockchain and cryptocurrency has changed.

On March 5, 2018, PayPal officially submitted a patented technical document to the United States Patent and Trademark Office (USPTO), which aims to accelerate cryptocurrency payments by eliminating the verification payment link. An executive of PayPal said: “We are interested in any technology, processes and procedures that may help us become better in the financial field.” The executive also revealed that PayPal has a dedicated blockchain research team. , The task of the team is to study the technical potential of blockchain and determine whether PayPal can achieve better development through blockchain technology in the future.

PayPal announced the launch of a new service called “Checkout with Crypto” on October 21, 2020. Its customers will be able to use PayPal accounts to make purchases or transactions with Bitcoin and other virtual currencies. Paypal said that this new service will enable customers to use the company’s digital wallet to hold and exchange cryptocurrencies such as Bitcoin, Ethereum, Bitcoin Cash and Litecoin. People can shop, withdraw and send money online through the digital wallet.

Dan Schulman, President and CEO of PayPal, demonstrated his first use of PayPal’s cryptocurrency settlement service through a video. He bought a pair of Lucchese brand leather boots with Bitcoin from the Bronco Western Wear website and said: “With digital payment and digital currency Using acceleration, the launch of’Checkout with Crypto’ will continue to promote our attention to mainstream cryptocurrency applications, while continuing to provide PayPal customers with more choices and flexible payment methods. They can use the PayPal wallet to achieve all this. Enabling cryptocurrency Buying among companies around the world is the next chapter in promoting the popularization and acceptance of digital currencies.”

After going around, PayPal finally embraced cryptocurrency.

Square, a complete cryptocurrency champion

The CEO of Twitter and Square, Jack Dorsey, has long been a supporter of Bitcoin. He stated in 2018 that he believes that Bitcoin will eventually become the world’s single currency within the next ten years. Dorsey also owns an undisclosed amount of Bitcoin. He said on an earnings conference call in 2018: “Bitcoin is not just about buying and selling for us. We really believe that this is a part of our industry. Revolutionary technology, we hope to learn as soon as possible.”

In 2018, Square added Bitcoin transactions to its Cash application, allowing users to buy and sell Bitcoin.

In September 2020, Square launched the non-profit Crypto Open Patent Alliance (Crypto Open Patent Alliance), which aims to “defend patent invaders” and maintain the open source nature of cryptocurrencies by concentrating patents in a shared library .

In October 2020, Square publicly announced that the company had purchased $50 million in Bitcoin as part of the company’s direct investment in the cryptocurrency field. Square purchased a total of 4,709 bitcoins, which the company said accounted for about 1% of its total assets as of the end of the second quarter. The average purchase price of Square is $10,617, which is $39,553 according to the Bitcoin price at the time of writing. The transaction brought a 372.5% return for Square.

Bitcoin’s recent three-month trend

The cryptocurrency journey of the payment giant

Source: Coindesk

Square stated that the reason for buying Bitcoin is because it believes that “Bitcoin may become a more common currency in the future” and that cryptocurrency is “a tool that empowers the economy and provides a way for the world to participate in the world.” The way of the monetary system”. Square has been accepting Bitcoin as a payment method since 2014.

In addition, Square has also developed Cash App software, which is a peer-to-peer payment application that also provides bitcoin purchases and free stock transactions. Cash App provides services to more than 36 million active users every month, many of whom use Visa-branded cash cards linked to Cash App for debit card purchases.

Square CEO Jack Dorsey said on July 16 that the company is considering developing a hardware bitcoin wallet to allow consumers to better control the cryptocurrency they hold. Dorsey made this comment on Twitter of another company that he also serves as CEO. Subsequently, Square’s stock price rose 2.7%, a 1% increase at the close of the day.

Bitcoin trading has become a rapidly growing business in Square’s territory. Square allows consumers to use the Cash App to spend and store Bitcoin. Square’s Bitcoin revenue also increased from $516.5 million in 2019 to $4.75 billion last year.

Bitcoin trading drives Square’s profit and revenue

The cryptocurrency journey of the payment giant

Source: The Block

In May 2021, Square reported that its first quarter bitcoin sales revenue was US$306 million and total revenue was US$1.38 billion. The company reported that this was an increase of 367% over the same period last year, adding that this increase was “due to the increase in the number of active Bitcoin customers and the increase in customer demand.” Bitcoin-related revenue surges also contributed to Square’s overall Revenue in the first quarter increased by 266%.

In April 2021, Fidelity Investment Group, Square, Coinbase and other companies will jointly establish a Bitcoin trading group called the “Crypto Council for Innovation”. The group will lobby policy makers to support the emerging Bitcoin and cryptocurrency industry, aiming to ensure that policy makers understand the importance of cryptocurrency innovation and create favorable regulatory conditions for the prosperity of the industry. It can be seen that Square has become an “outright” cryptocurrency supporter.

The market’s acceptance of cryptocurrencies has increased year by year

In fact, in addition to payment giants, automakers Tesla and Mazzanti, transportation industry China Global Shipping (SINO.US), real estate industry Piso Barato Inmobiliaria, Venezuelan retail giant Rattan and other companies in various industries have begun to accept Cryptocurrency payments.

Although cryptocurrency payment is still in its infancy, as cryptocurrencies continue to break the circle, the market is gradually accepting its existence and gradually accepting its value as a payment medium. Consulting company Industrial ARC has issued a report, which mentioned that the global cryptocurrency payment ecosystem market is expected to reach 630 million U.S. dollars by 2025, growing at a compound annual growth rate of 23.4% from 2020 to 2025. Factors such as the growth of the trading market and business flexibility have also promoted the growth of the global cryptocurrency payment ecosystem market.

The cryptocurrency bank market in various regions

The cryptocurrency journey of the payment giant

Source: Data Bridge Market Research

 

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