Benzinga -
- After the industry meltdown, U.S. payment giants Visa Inc (NYSE: V) and Mastercard Inc (NYSE: MA) paused plans to forge new partnerships with crypto firms.
- Both Visa and Mastercard postponed the launch of certain products and services related to crypto until recovery of the market conditions and the regulatory environment, Reuters reports citing familiar sources.
- The bankruptcies of industry majors FTX and BlockFi rattled investors and increased regulatory scrutiny on the sector.
- "Recent high-profile failures in the crypto sector are an important reminder that we have a long way to go before crypto becomes a part of mainstream payments and financial services," a Visa spokesperson said. It does not change the company's crypto strategy and focus, he added.
- A spokesperson for Mastercard said: "Our efforts continue to focus on the underlying blockchain technology and how that can be applied to help address current pain points and build more efficient systems."
- Card companies, which pocket a small percentage of the dollar value of transactions they process, forged multiple partnerships with crypto firms and dedicated teams to explore blockchain technology to tap the crypto boom.
- Mastercard collaborated with crypto lender Nexo in April to launch a "crypto-backed" payment card.
- In November, Visa dumped its global credit card agreements with FTX within a month after announcing an expanded partnership with the exchange.
- In 2021, American Express Co (NYSE: AXP) shared plans to use crypto as a possible option to redeem reward points in the future.
- But it is reportedly not viewing crypto tokens as a strategic priority soon.
- "In the near term, we don't see crypto replacing our core payment and lending services," an AmEx spokesperson stated, adding that the company continues to explore meaningful use cases for the technology.
- Price Action: V shares closed lower by 0.29% at $219.72 on Tuesday.
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