Mastercard announces partnership with Bakkt
Updated: Nov 3, 2021
Jennifer Schonberger, Mon, October 25, 2021
Cryptocurrency exchange Bakkt stock soared on Monday, after announcing a partnership with Mastercard (MA) to offer crypto debit and credit cards, making it easier for consumers to pay using digital coins.
Via Mastercard and Bakkt (BKKT), businesses and banks will be able to issue their own branded crypto debit and credit cards to consumers who want them. Holders can use bitcoin purchased through Bakkt with the card, or link to a fiat-based funding source, and receive bitcoin rewards.
Bakkt’s stock, which publicly listed on the NYSE on October 18, skyrocketed in Monday's session and briefly triggered a halt. With momentum already behind it, Bakkt's announcement of a separate deal with Fiserv (FISV) sent its shares up by a staggering 175% intraday.
“We want to provide consumer choice. We want to be able to provide the availability to use crypto currency in an everyday transaction,” Gavin Michael, Bakkt's CEO told Yahoo Finance at the All Markets Summit.
With the Mastercard partnership, companies will also be able to offer crypto as part of their loyalty reward programs backed by Bakkt. For instance, hotels or restaurants who offer points for freebies or other perks could also offer customers the option to convert the points into cryptocurrency of their choosing. The partnership comes as more Americans become interested in transacting in digital assets, with businesses and service providers making incremental steps toward making it easier to transact in crypto.
“We’re seeing an increased amount of consumer choice in the ability to be able to use their form of payment,” Michael said. “While we’re in the early stages of making this run, we’re showing the ability for people to be able to offer our merchants the ability to offer these new forms of payment as a way to acquire and appeal to new customer segments. We see a demographic that skews somewhat younger," he added.
Nearly half of respondents purchased crypto in the first half of 2021, according to a Bakkt survey of 2000 consumers. And, according to the Mastercard New Payments Index, 77% of millennials stated that they are interested in learning more about cryptocurrency, with 75% saying that they would use cryptocurrency if they understood it better.
The partnership with Mastercard comes after Bakkt partnered with Google to allow its users to purchase goods and services using Bitcoin and other cryptocurrencies through the Google Pay wallet and payment system. Bakkt, which started as a cryptocurrency exchange for institutional investors, has moved into the consumer space with an app aimed at being a tool to let people manage their digital assets — including cryptocurrencies – similar to Venmo. Bakkt projects the app will amass more than 30 million users in five years.
Adapted from Yahoo! Finance.