Mastercard Launches P2P Crypto Credentials Pilot Program

Mastercard has introduced its crypto credentials P2P pilot program, aiming to streamline crypto transactions and reduce user errors for customers.

The pilot includes Mastercard’s exchange partners Bit2Me, Lirium, Mercado, and wallet provider FoxBit. Walter Pimenta, Mastercard’s executive vice president for product and engineering in Latin America, commented:

“As interest in blockchain and digital assets continues to surge in Latin America and around the world, it is essential to keep delivering trusted and verifiable interactions across public blockchain networks.”

Mastercard’s crypto credentials system assigns human-readable aliases to users, verified by Mastercard, eliminating the need to handle traditional, lengthy wallet addresses. The program also aims to reduce financial loss by pre-screening transactions, preventing the sending of incompatible crypto assets to recipients’ addresses.

Cryptocurrencies and digital assets have traditionally been hindered by complicated user interfaces, posing significant challenges for new or inexperienced users.

The use of complex addresses, technical terminology, and the risk of irreversible financial loss from sending assets to the wrong blockchain can deter users who are familiar with Venmo, PayPal, and online banking apps from entering the crypto market.

Despite Mastercard’s efforts to simplify the crypto transaction process, concerns about centralisation remain.

The company’s crypto credentials program is not decentralised and relies on Mastercard to verify user identities and screen transactions for potential issues that could result in lost funds.

Additionally, the need for Know Your Customer (KYC) verification and the storage of sensitive data with Mastercard raises security concerns.

Mastercard has faced several high-profile data breaches through attacks on its payment processing partners and retail clients. Since 2005, over 40 million Mastercard accounts have been exposed to hackers targeting centralised points of failure within its extensive network of payment processors, retail clients, and IT partners.