Credit Card Giants Bring Digital Ledger Technology to B2B Cross-Border Payments


Marisa Fasciano
Content Specialist
Marisa is a communications consultant based in New York with a background in social research, diversity education, and nonprofit development.  She has lived and traveled abroad extensively… Read more

Mastercard and American Express both recently announced that they are streamlining B2B cross-border payments with blockchain, the revolutionary technology that stores transaction data in an encrypted master ledger accessible over the internet.  In October, Mastercard opened its blockchain technology via its API to developers.  Businesses can now use it for purposes like paying foreign invoices or financing international trade.  A few weeks later, American Express revealed that US businesses are taking advantage of its blockchain-based payment method to send money to UK businesses that bank with Santander.  This new payment method resulted from a partnership between Amex’s FX International Payments service and the San Francisco-based blockchain start up Ripple.

Benefits of Blockchain for Business

The biggest benefit of blockchain payments for businesses is faster speed.  "Transfers that used to take days will be completed in real time, allowing money to move as fast as business today," said Brad Garlinghouse, the CEO of Ripple.  Other advantages include less reliance on intermediaries, no need for credit cards, lower costs, and greater transparency.  Both the sender and recipient can see what’s happening at every step of the process. To realize all these benefits, security isn’t sacrificed, because transactions on the blockchain are anonymous and cryptographically protected.

Mastercard Takes a Multi-Faceted Approach

Mastercard is marketing its blockchain payments, which have been integrated into the company’s settlement network of 22,000 financial institutions, as just one option among its many cross-border payment solutions.   "When it comes to payments, we want to provide choice and flexibility to our partners where they are able to seamlessly use both our existing and new payment rails based on the needs and requirements of their customers," stated Ken Moore, executive vice president of Mastercard Labs.

Select consumers, businesses, and banks can use Mastercard’s ledger technology for a variety of purposes.  It’s particularly useful for verifying provenance, recording the history of high-value assets (e.g., vehicle service history), and settling person-to-person (P2P) payments.  As examples, an individual can take their Mastercard credit card to a regular ATM and record on the blockchain that a piece of art reached its new owner; an auto shop can enter details of a car repair, which are accessible only to authorized parties, on the ledger; or two people can get confirmation of their P2P money transfer recorded on the blockchain.  In all of these cases, blockchain ensures transparency and prevents fraud. 

American Express Stays Focused

Whereas Mastercard seems to be approaching its blockchain technology from all angles, American Express has limited its focus to one payments corridor—US to UK—and one bank—Santander—for now, testing the waters before it adds more banks.  ”American Express has a long history of integrating new technologies...,” stated chief information officer Marc Gordon.  “This collaboration with Ripple and Santander represents the next step forward on our blockchain journey, evolving the way we move money around the world.”

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