by Pratik Makadiya
Crypto supporters on Twitter took on Mastercard as its users reported unannounced card payment failures. The failure was caused by some technical glitch surrounding payment processing mechanism which Mastercard reported to have resolved later. The issue is said to have affected a ‘large number’ of international bank customers.
Mastercard tweeted “We are aware there may have been some issues in processing a limited number of transactions earlier. The situation has been resolved, and those transactions are now working as normal.”
Irate MasterCard users reacted furiously to this as many of them suggested that this downturn wouldn’t have happened if Mastercard had used Ripple technology.
A Twitter user ChuckRoc replied: “This is why you will soon be replaced by #Bitcoin and the like.”
The MasterCard outage wasn’t limited to the ordinary people. Companies that depend on MasterCard and Visa were also affected by this incidence. For example, Revolut, a London-based digital banking startup tweeted: “There is a problem with the MasterCard network which is causing some card payments to fail. This issue is affecting a large number of international banks. We’ll update you as soon as we know more.”
Mastercard faces pressure to adopt blockchain
Mastercard and Visa have been undisputed champions in the digital payment industry. For years people have been using their services as they provide a high degree of convenience for consumers globally. Nearly all major banks have either of the two as their digital payment partners for their credit and debit cards.
They were supposedly the quickest until blockchain-based payment systems like Ripple emerged. Since then there has been much pressure on Mastercard to adopt this nascent technology. Over time, Ripple has also proved that can be a valuable ally for traditional financial players, especially when it comes to cross-border payments. The current solutions are both costly and take a long time to complete. MasterCard has acknowledged this problem in the past and has been making active endeavors for new solutions. It was also reported that Mastercard was keeping tabs on the blockchain technology and was planning to develop a similar solution for itself.
As these technology glitches emerge, they significantly increase the pressure on traditional digital payment companies to use the technology as customers demand a quicker, cheaper and stronger solution, something which it is believed blockchain technologies like Ripple can provide.
Is the rise of Ripple a threat to Mastercard?
Ripple slowly, with its blockchain and quicker and cheaper payment protocol, has been capturing the world. Ripple’s distributed ledger technology has been welcomed by several major bank, payment processor companies, and central banks. Its xCurrent product has received tremendous appreciation from banks as it enables real-time settlements and almost 100 banking clients are said to be using it. In the word of its CEO Garlinghouse, “it allows you to have real-time liquidity.”
In the latest update, American Express, another digital payment giant confirmed that the company was officially using xCurrent.
As Ripple xCurrent has demonstrated the potential to allow banks to settle transactions at a faster pace, with low cost and less friction and many banks already testing Ripple’s strength, the threat of losing its marketing is looming over Mastercard. Mastercard will have to act quickly to build its technology or partner with companies like Ripple, or it will be soon outsmarted and may lose what it has gained over the years.