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Mastercard Unveils Initiative to Streamline Crypto Transactions and Minimize User Mistakes

Mastercard Launches New Program to Streamline Crypto Transactions and Minimize Errors

Mastercard is taking steps to simplify crypto transactions, aiming to encourage wider adoption of digital assets for everyday transactions. The global payments giant based in the US has introduced a new initiative to evaluate its Crypto Credential program. The goal of this program is to prevent users from sending crypto assets to incompatible wallets. Bit2Me, Lirium, and Mercado, leading crypto exchanges, have partnered with Mastercard for this pilot program. Additionally, crypto wallet provider FoxBit has joined the initiative.

What Prompted Mastercard to Launch This Initiative?

Mastercard observed numerous instances of incorrect crypto transactions during its research. Factors such as complex wallet addresses and technical errors resulting from sending crypto tokens to incompatible blockchains were identified as top reasons for financial losses incurred by both senders and recipients.

Due to these risks, Mastercard is concerned that people may be deterred from engaging in crypto-based financial transactions and continue to rely on online payment platforms like Venmo and PayPal.

Walter Pimenta, Executive Vice President for Product and Engineering at Mastercard, emphasized the importance of delivering trusted interactions across public blockchain networks amidst growing interest in blockchain and digital assets worldwide.

What Does This Pilot Program Offer?

As part of this program, Mastercard will serve as an intermediary to verify users’ identities for transactions. The company will screen transactions before processing to ensure that the tokens being sent match the correct blockchain. Users’ KYC details will be stored on Mastercard’s servers.

Participating exchanges will verify users and issue simple aliases for sending and receiving funds across all supported platforms.

Mastercard’s statement explained, “When a user initiates a transfer, Mastercard Crypto Credential verifies that the recipient’s alias is valid and that the recipient’s wallet supports the digital asset and associated blockchain. If the receiving wallet does not support the asset or blockchain, the sender is notified, and the transaction does not proceed.”

Mastercard views its crypto credential P2P initiative as an opportunity to support the global remittance market. With a valuation of $411.33 billion, Mastercard has been exploring crypto and blockchain avenues to modernize financial systems. In April, the company introduced a crypto credit card, CBDC partner program, and crypto trading initiatives. The crypto credential vision was first unveiled in 2023.

However, it’s worth noting that Mastercard has faced security breaches, with 40 million accounts breached since 2005, according to CoinTelegraph.

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