Payment leader Mastercard plans to develop a blockchain platform for cross-border settlements in partnership with Ripple-backed fintech research company R3. According to information reaching our desk, Mastercard confirms that both companies have entered into a binding agreement that will see the two firms develop and pilot a payment solution project.
Initially, the payment solution project will strive to connect payment schemes faster while attracting financial institutions and banks with the support of Mastercard’s payment and clearing platform.
The partnership between the two companies brings on board the combined experience of Mastercard platform in payment systems with existing Ripple-powered R3 prowess in developing blockchain solutions. Industry players are hoping the new platform will aid in tackling industry challenges that have been associated with the money transfer such as costly processing fees, liquidity management and scarcity of connectivity and standardization between financial institutions and domestic clearing networks.
According to Ripple partner R3’s Chief Executive Officer, David E. Rutter:
“Since time immemorial, all institutions, large or small, depend on the ability to send and receive funds. However, all too often, the technology they count on proves to be cumbersome and expensive particularly international payments can be a real pain.”
Rutter continued,
“That is why we decided to build Corda specifically for enterprise use cases such as this. We look forward to working with Mastercard in revolutionizing the money transfer sector by supporting the payment giant bring blockchain-enabled settlement to businesses around the world.”
According to the press release that got issued earlier today by R3, the blockchain cross-border payment solution platform will be developed on Corda’s commercial version, the Corda Enterprise, as opposed to the commonly referred open-source Corda Platform.
As per an R3 technical whitepaper,
“Corda does not instruct settlements using a blockchain, and by design, it does not use proof-of-work or miners.”
For those who are not willing to go through the endless whitepaper, Corda is an authentic P2P platform of nodes. Every network of nodes is a Java Virtual Machine run-time environment that hosts Corda services while implementing discrete applications.
According to Mastercard press statement released earlier during the week, the two companies plan to pilot the new blockchain-backed international settlement solution to focus on connecting international payments faster with financial institutions, schemes, and infrastructures.
Mastercard’s Plan to Create More Avenues to Move Money in Association with Ripple Partner
As per Mastercard’s press release, the blockchain-enabled international payment solution is part of the company’s plans to reinforce its international settlement platform. Building on its purchase of Transfast, a global payment firm, earlier this year, Mastercard is positioning itself to be a solution provider in the money transfer industry.
The partnership with Ripple-powered fintech firm R3 promises Mastercard to achieve it’s giant’s multi-rail strategy which strives to see clients choose how their payments are moved.
According to Peter Klien, Mastercard’s executive vice president of new settlement platforms:
“Building a new and better international business-to-business settlement solution by improving global connectivity in the account-to-account sphere is vital to Mastercard’s vision. Our mandate is to deliver international payment infrastructure choice and connectivity, as shown through our recent strategic purchases and partnership, including our recent partnership with R3.”
Seems the Partnership Between the Two Corporate Giants is a Match Made in Heaven
In what can be considered as a match made in heaven, the two corporate giants appear to be cooperating on a whole new level. Before today’s new partnership between Ripple-backed R3 and Mastercard, the payment service provider, Mastercard, had joined the Marco Polo trade finance blockchain that was founded by TradeIX and R3.
It is Marco Polo trade finance blockchain intention to use every relevant payment resource available to settle trade settlements between trading partners who are carefully examined before being introduced into the program.
Looking at the history between the two companies, it is evident that there is more to what meets the eye. Mastercard is a global payment service provider while R3 is the owner of a massive infrastructure that accommodates over 2000 experts who work together across various platforms and borders to make Corda a success. And notably, being a long-standing Ripple partner, R3 boasts the capabilities of fast, cheap, and secure transfer of remittances, which certainly will help Mastercard with its mission.
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