Mastercard experienced a cross-border transaction volume decrease in Q1 2018 because of banks’ refusal to accept cryptocurrency transactions.
Although the company’s cross-border payments volume went up by 19% overall in Q1, it is still 2% lower than the previous quarter. She said it is “in part due to the drop in crypto wallet funding”.
“What the issue is that a number of the banks have decided, in particular in the United States, that they would not allow the usage of cards for this particular funding vehicle. And that’s why we have already seen a relatively significant decrease of the volume related to that event.” – Ms. Martina Hund-Mejean, Chief Financial Officer, Mastercard
Previously, major US and Canadian banks like JPMorgan Chase, Bank of America, Bank of Montreal, Capital One, and Citi have banned customers who use their payment cards to buy cryptocurrency. Cryptocurrency is associated with high credit risk because of the virtual currencies’ price volatility.
Mr. Ajay Banga, the Chief Executive Officer of Mastercard, added that there are new restrictions and uncertainty in exchanges that also contributed to the decline in volume.
The CEO of Mastercard also said that the decrease in the interest of the people did not help. He said that there is less interest in cryptos now compared to December 2017.
These are just some of the reasons as to why Mastercard is not interested in putting cryptocurrencies as part of their earnings.
“We actually said that this is not something we count on because we just don’t know how to predict it or we don’t even want to count it.” – Mr. Ajay Banga, CEO, Mastercard
Recently, Mastercard filed a blockchain related patent for verifying identity. It is a “technical solution” that can aid in verification of identity.