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Mastercard announced the news via a press release on Monday (October 25, 2021). According to the announcement, the partnership with Bakkt will help to expand the way customers use cryptocurrency.
Banks and merchants using Mastercard will be able to incorporate crypto into their products. These include the issuance of branded cryptocurrency credit and debit cards, and enabling consumers to trade and hold digital assets via custodial wallets offered by Bakkt.
Furthermore, the collaboration will change the way in which Mastercard consumers collect their loyalty rewards, which will have the cryptocurrency option. Their crypto holdings can be converted and used to purchase goods and services across various merchants.
The latest development is in line with Mastercard's efforts to increase cryptocurrency adoption, with the company also investing in the digital asset industry. In September, the payment processing giant acquired crypto tracing firm CipherTrace, which will help Mastercard to monitor illicit transactions, thereby providing transparency to its clients.
Earlier in 2021, Mastercard announced plans to start supporting a select number of crypto assets on its network later in the year, without mentioning the exact cryptocurrencies.
Commenting on the latest collaboration,
Mastercard's executive vice president of Digital Payments, Sherri Haymond, said:
“Mastercard is committed to offering a wide range of payment solutions that deliver more choice, value and impact every day. Together with Bakkt and grounded by our principled approach to innovation, we’ll not only empower our partners to offer a dynamic mix of digital assets options, but also deliver differentiated and relevant consumer experiences.”
Also speaking on the partnership was Bakkt's executive vice president of Loyalty Rewards Payments, Nancy Gordon, who said that the move by both companies was in response to an increasing cryptocurrency demand. In Gordon's words:
"As brands and merchants look to appeal to younger consumers and their transaction preferences, these new offerings represent a unique opportunity to satisfy increasing demand for crypto, payment and rewards flexibility.”
Bakkt, which is a spinoff of Intercontinental Exchange, owner of the New York Stock Exchange (NYSE), also inked a partnership deal with fintech and financial services giant Fiserv, also on October 25.
The nature of the collaboration is similar to that with Mastercard, which would expand consumers' use of cryptocurrencies. A statement from Fiserv's Fintech head, Sunil Sachdev, said:
"Fiserv is in a unique position to connect merchants and financial institutions utilizing a unified digital asset platform, laying the foundation for an integrated digital asset ecosystem that can bring value and convenience to our clients and their customers."
Following the news of the partnerships between both companies, Bakkt's shares skyrocketed to 234%, closing at $30.60 on Monday. Earlier in October, the digital assets manager debuted on the NYSE, after a merger with VPC Impact Holdings, a special purpose acquisition company (SPAC).