Mastercard has launched a pilot program called crypto credentials P2P in order to simplify crypto transactions and eliminate user errors for its customers. The program involves collaboration with exchange partners Bit2Me, Lirium, Mercado, and wallet provider FoxBit. Walter Pimenta, Mastercard’s executive vice president for product and engineering for Latin America, stated that the credit giant’s crypto credentials system assigns easily understandable aliases to individuals, which are verified by Mastercard. This eliminates the need for users to rely on long strings of numbers and letters that characterize traditional wallet addresses.
Furthermore, the crypto credentials program aims to prevent financial loss by pre-screening transactions to ensure that users do not send incompatible crypto assets to the wrong address. This feature addresses the complex user interfaces and technical challenges that have deterred many potential users from entering the crypto space. The use of complex addresses, technical jargon, and the fear of losing assets due to sending them to the wrong chain have made platforms like Venmo, PayPal, and online banking apps more appealing to users.
Crypto analyst and influencer Miles Deutscher highlighted these issues in 2022, claiming that they were hindering mass adoption of cryptocurrencies. Despite Mastercard’s efforts to streamline the crypto transaction process, concerns about centralization persist. The crypto credentials program relies on Mastercard as an intermediary to verify users’ identities and screen transactions for any potential issues. This centralization, along with the storage of sensitive data and the need for Know Your Customer verification, raises security concerns among individuals who prioritize data protection.
It is worth noting that Mastercard has experienced several high-profile data breaches in the past, which were a result of malicious attacks on its payment processing partners and retail clients. These breaches have exposed the data of more than 40 million Mastercard accounts since 2005. Such incidents highlight the vulnerabilities associated with centralized systems and the importance of robust security measures.