The credit card company hopes to streamline transactions and limit user errors through an alias credential system.
Mastercard has launched its P2P cryptocurrency credentials pilot program in hopes of streamlining cryptocurrency transactions and eliminating user errors.
The test includes Mastercard exchange partners Bit2Me, Lirium, Mercado and wallet provider FoxBit. Mastercard executive vice president of products and engineering for Latin America, Walter Pimenta, commented:
“As interest in blockchain and digital assets continues to increase in Latin America and around the world, it is essential to continue offering trusted and verifiable interactions through public blockchain networks.”
The credit giant's cryptocurrency credential system assigns human-readable 'aliases' to individuals, which are verified by Mastercard, so users no longer have to rely on sending and verifying the long string of numbers and letters that characterize traditional wallet addresses.
Additionally, the cryptocurrency credential program is attempting to mitigate financial losses by pre-screening transactions to prevent users from sending incompatible crypto assets to the recipient's address.
Cryptocurrencies and other digital assets have long suffered from complex user interfaces that present technical challenges and can be somewhat intimidating to the new or untrained user.
Complex addresses, technical jargon, and the possibility of permanent financial loss due to sending assets to the wrong chain are enough to keep users accustomed to Venmo, PayPal, and online banking apps away from the crypto space.
Cryptocurrency analyst and influencer Miles Deutscher described the issue in 2022 and claimed it was preventing mass adoption
Despite Mastercard's move to simplify the cryptocurrency transaction process, concerns about centralization remain.
The credit company's crypto credential program is not a decentralized initiative and relies on Mastercard as an intermediary to verify the user's identity and review the transaction for any issues that could cause the loss of funds.
Additional Know Your Customer (KYC) verification and storing sensitive data with Mastercard also present concerns for security-conscious individuals.
Mastercard has been the subject of several high-profile data breaches that occurred through malicious attacks on its payment processing partners and retail customers.
Since 2005, more than 40 million Mastercard accounts have been exposed to hackers and malicious actors targeting centralized points of failure across Mastercard's extensive network of payment processors, retail customers and information technology partners.
