Payments giant Mastercard has partnered with R3, a New York-headquartered blockchain software firm, to develop blockchain-powered cross-border payments solution.
Initially, the partnership between Mastercard and R3 will focus on connecting global payment infrastructures, schemes and banks supported by a clearing and settlement network operated by Mastercard.
According to Mastercard, the partnership is its latest step in multi-rail strategy that offers customers the choice on how their money is transferred.
By combining R3’s enterprise in blockchain with Mastercard’s payment systems, assets and distribution, the partnership is expected to offer new, value-added services for customers. It is expected to address factors such as high processing overheads, liquidity management and the lack of standardisation and processes between banks and domestic clearing systems.
Mastercard new payment platforms executive vice-president Peter Klein said: “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.
“It confirms our commitment to innovation, both home-grown and through partnerships and acquisitions, to support advances and innovation in the increasingly complex global payment infrastructure space.”
The blockchain model will help banks offer frictionless real-time payments
The blockchain-enabled model is expected to support banks in delivering a single frictionless real-time payments proposition. Mastercard will act as the network operator to process, clear and settle international payments.
Mastercard will implement R3’s Corda ecosystem, which is used by more than 300 of the leading financial service firms, technology companies, central banks, regulators and trade associations.
R3 CEO David E Rutter said: “We are excited to partner with Mastercard to help shape the future of the digital payments ecosystem. All institutions – large or small – rely on the ability to send and receive payments, but all too often the technology they rely upon is cumbersome and expensive. Cross-border payments can be a particular pain point.
“Corda was designed specifically for enterprise use cases such as this, and we look forward supporting Mastercard in bringing blockchain-enabled payments businesses across the globe.”
In July, Mastercard bolstered its cross-border network reach by acquiring Transfast. The deal is expected to enable Mastercard’s partner banks to service customers, businesses, governments and merchants allowing them to send and receive money from across the border, with greater speed and ease.
