If web3 is the incoming new reality and crypto is to achieve mainstream, daily use, then a key area will be around payment integrations. There is talk, particularly in Bitcoin maximalist circles, of a self-contained economy, which in this context means goods and services sold in Bitcoin, and with no requirement to ever switch from blockchain-based currency to fiat currency.
Perhaps that’s a proposed ideal that can one day be achieved. There are coherent arguments that make the case for this kind of scenario, but in the meantime, what’s required are easy intersections between traditional payment systems and cryptocurrencies, which can be navigated by users who may not be deeply versed in the technicalities of blockchain transactions.
With this in mind, there have been several recent developments indicating an acceleration of the integration process, as some major names partner with crypto developers in order to facilitate the use of digital currencies in everyday transactions.
Immersve and Mastercard
Payment options don’t come much more mainstream than Mastercard, which has now partnered with the decentralized transaction protocol Immersve to create a payment alternative allowing users to make purchases from their crypto wallets at any merchants that accept Mastercard.
A key feature is that the Mastercard/Immersve card does not require users to hold their crypto with a third party, as it interacts directly with users’ own wallets. This is critical in a post-FTX environment, in which crypto holders may be unwilling to place large funds indefinitely on a centralized platform. What's more, even aside from the aftershocks of FTX, a defining purpose of crypto is monetary self-custody and the bypassing of intermediaries.
With this new card, after a transaction is completed by a user, the protocol makes use of the Circle-issued stablecoin USDC, which is converted to fiat to settle transactions on the Mastercard network. Initially, the product will launch in New Zealand and Australia, with a view to releasing in the EU, the US and the UK.
This partnership between Mastercard and Immersve may represent a significant step forward towards a smooth integration between crypto and traditional payment mechanisms while ensuring that users maintain personal control of their digital assets.
It’s notable that the partnership tends to make use of the term web3 rather than crypto, for example referring to web3 wallets. This subtle shift is indicative of what amounts to an informal rebranding, as decentralized digital assets enter the mainstream. If these kinds of integration become more commonplace, we’re likely to see increased reference to a switch from web2 to web3; a sanitized description which sounds more familiar, less speculative, and steers away from associating with disgraced entities such as FTX.
Wirex and Visa
The UK-based digital payments platform Wirex, which is focused on crypto and web3, has signed a globally-reaching partnership with Visa. This agreement extends to APAC and the UK and will facilitate the issuance of crypto-linked debit cards, which are already available to Wirex users in the US.
This comes soon after Wirex, in December of last year, added 52 new crypto tokens to its platform, enabling users to access 130 cryptocurrencies. A key difference between Wirex and the Mastercard/Immersve model is that Wirex offers a custodial service, meaning that users are placing their funds with a third party from which they can be utilized for purchases.
This divergence, between custodial and non-custodial mechanisms, may become a key fork in the road as crypto moves towards real world integration. It’s worth keeping in mind that to current users of decentralized applications and proto-metaverse/web3 payments (such as in NFT projects and blockchain games), self-managed transactions are standard. It’s plausible, then, that self-custody is the direction to which the mainstream will gradually be drawn, rather than crypto, or web3, being packaged up into traditional mechanisms.
Mercuryo and ConSensys
Fintech platform Mercuryo is focused on bringing together the worlds of conventional finance and crypto, and it is now working with ConSensys, the blockchain development studio that is, among many other web3-oriented activities, behind the MetaMask crypto wallet.
The plan is to ease conversion from fiat to crypto by allowing users to purchase cryptocurrencies without the inconvenience of having to go through exchanges. Instead, digital assets can be purchased directly within MetaMask using conventional payment methods, such as bank cards, Apple Pay and Google Pay. Full identity verification is not required, although purchases are limited to a maximum of €699.
MetaMask is a ubiquitous tool when transacting on Ethereum, and if a key to onboarding new users is the removal of friction between crypto and fiat currencies, then streamlining the integration process may be a useful development.
Overall, when looking at the partnerships and developments unfolding, there is an unmistakable trend towards an intersection between traditional finance and cryptocurrencies, such that transitioning between the two becomes as seamless as possible. Relatedly, web3 is increasingly being used as a synonym for crypto, reflecting the shift towards a more user-friendly image that segues intuitively into our comfort with an increased reliance on the web.
Projecting more speculatively into the future, it remains to be seen whether crypto and traditional transactions simply integrate into one another, or whether, on a longer time scale, the former begins to supersede the latter.
