MetaMask is introducing its blockchain-based debit card in partnership with leading payment brands Mastercard and Baanx, a crypto payments provider.
For now, however, MetaMask’s new card is still in a limited pilot phase with just a few thousand digital-only cards made available to users in the EU and the UK. Wider distribution is not expected until later this year.
The collaboration leverages the strengths of the three partner firms: MetaMark’s emphasis on user security, Mastercard’s vast payment network, and Baanx’s fintech expertise.
How Does it Work?
Users of the new MetaMask card can make purchases directly with their wETH, USDT, and USDC assets held on the layer-2 network Linea, an Ethereum-based network.
Apart from the option of choosing the crypto asset they wish to transact with, customers are also free to determine where to store their keys.
Consensys, the owners of Metamask, say Linea will ensure that transactions are conducted speedily and efficiently.
According to Consensys Senior Product Manager, Lorenzo Santos, swiping the new card will create an onchain transaction that sends tokens from the wallet of the user to the “Crypto Life” smart contract. This enables the authorization of the transaction by the point-of-sale system of the merchant accepting the card.
Conversion from cryptocurrency to fiat money is then handled by the smart contract. The last procedure is the finalization of the payment via Mastercard’s secure payment network.
An Effective Option for The Unbanked
The MetaMask/MasterCard/Baanx partnership comes at a time of increasing linkages between traditional financial services and digital assets such as those provided by blockchain technology.
The trend today is a rise in the tokenization of conventional instruments such as credit and bonds. There is also a rising adoption of Bitcoin and Ethereum exchange-traded funds by asset managers.
All these are motivating leading payment providers to experiment with the best ways to incorporate blockchain technology into payment rails.
Although MetaMask’s new card is currently in its pilot stage in EU markets, it is an effort that has the potential to provide banking services to unbanked people all over the world.
It can also help in the streamlining of cryptocurrency payments for those operating in regions bedeviled by high inflation. Simon Jones, Baanx’s chief commercial officer opines that :
With 1.2 billion people in the world officially unbanked, we are working towards a vision whereby anybody with a mobile phone can access financial services. Using new technologies, financial inclusion for all is our goal.
In recognition of the growing influence of blockchain and cryptocurrencies, Mastercard has been entering into key partnerships with leading players in the industry.
For instance, In January 2023, Mastercard and Binance introduced a prepaid card in Brazil. The card empowers users to pay with their crypto assets.
The partnership came to an end in August 2023 due to Binance’s legal challenges with regulators in the US and the resignation of its CEO, Changpeng Zhao.
