Mastercard partnered with enterprise-focused blockchain startup R3 to “develop and pilot” a cross-border payments solution.
Per Wednesday’s announcement, the decentralized payment network will connect all banks and institutions using Mastercard-operated clearing and settlement network for faster payments schemes.
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“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,” Peter Klein, executive vice president of new payments platform at Mastercard, said.
“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.”
Addressing the shortcomings of payments networks
The global payments giant is heavily investing in cross-border payments networks. Earlier this year, it acquired Transfast to strengthen its claim in the sector. Meanwhile, it is also one of the signatory partners of Facebook’s Libra Association.
The announcement also detailed that the strategic partnership will take advantage of Mastercard’s infrastructure on the payments industry including its assets, brand, and distribution, while R3 will contribute its expertise in the blockchain ecosystem.
With the new solution, the two companies are aiming to tackle setbacks in the industry, including high processing overheads, liquidity management, and the existing lack of standardization and processes between banks and domestic clearing systems.
“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 [to] supporting Mastercard in bringing blockchain-enabled payments businesses across the globe,” David E. Rutter, chief executive of R3, added.