Mastercard & Bakkt Set to Offer Crypto Integration for Banks
Mastercard will partner with recently-listed Bakkt’s custodial services to offer banks and merchants crypto wallets, credit cards, and loyalty rewards programs.
Mastercard, one of the dominant global payments networks, has responded to its clients’ requests to help in providing crypto services to end-users. This comes as bitcoin hits an all-time high of over $60,000 and as the first bitcoin futures ETF is recently listed on the NYSE. At this point in history, interest in bitcoin is booming, and the 20000 plus Mastercard partners want to get in on the act.
Instead of dollars moving into crypto exchanges, banks would like to keep clients on their own platforms. Mastercard is partnering with the recently listed Bakkt to offer crypto wallets, credit and debit cards that earn spendable crypto rewards to its clients. According to Sherri Haymond, executive vice president of digital assets, Mastercard wants to make it easier to offer all their partners’ crypto service integration. Bakkt’s B2B2C business model enables its platform to be integrated into its partners’ platforms and channels.
Fungible loyalty rewards
Mr. Gavin Michael, the CEO of Bakkt says that merchants and restaurants can offer rewards in bitcoin, by having a scale that links the points they award to customers with a certain allocation of crypto. This prevents the situation where a customer shops at merchant X, accrues Y points, which sit idly in a rewards card, waiting for the next purchase. Now, the rewards become fungible, and can be redeemed almost anywhere.
Bakkt launched a digital wallet app in the first quarter of 2021. Companies like BestBuy, Choice Hotels, and Starbucks have made their loyalty programs compatible with Bakkt, and Doordash, Xbox, and Home Depot allow their gift cards to be uploaded to the platform.
Bakkt set to expand its user base
Michael has said that securing partnerships were a key part of the roadmap for the company, following the public listing. Mastercard is the latest partner to come on board. Michael has said that Bakkt’s ambition is to expand its user base to 31 million by 2025. Recently, Bakkt partnered with Google, to allow Bakkt’s Visa debit card to be used to pay with bitcoin at merchants accepting Google Pay. The company announced a partnership with Finastra to enable crypto trading for community banks and credit unions.
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