What Does Mastercard’s Biggest Acquisition Ever Have To Do With Ripple or XRP?
- Mastercard buys Denmark-based payments platform Nets for 2.85 billion euros
- Biggest-ever acquisition is part of its plan to push into faster payment
- This is a validation that real-time payment is the “coming wave”
- Faster payments are “good for XRP”
Ripple and Mastercard have no direct connections but has some indirectly. Both the payments company are the investors in Ripple-powered global remittance startup, SendFriend.
Another Ripple partner Earthport, an automated clearing house for payments received bids from Mastercard and Visa, a round won by the latter.
Mastercard acquisition targets real-time payment
Now, Mastercard is buying a Denmark-based payments platform Nets for 2.85 billion euros ($3.19 billion). This biggest-ever acquisition is part of its plan to push into faster payment.
With this purchase, Mastercard is getting an electronic billion platform and instant-payment and clearing services.
“Real time is real, it’s here and it keeps growing,” Michael Miebach, Mastercard’s chief product and innovation officer, said in an interview. “What we found in Nets is it’s a business that’s deeply ingrained in some of the most innovative and vibrant payments markets in the world.”
The plan is to expand the Nets business beyond their primary markets in the Nordic, shared Miebach.
But this acquisition spree of Mastercard — earlier this year it purchased Ethoca (merchants identity fraud), then Vyze (point-of-sale payment provider), and also Transactis (bill payments) and Transfast (cross-border payments network)— won’t end here.
Mastercard will continue to look for acquisition opportunities in the real-time payments space, as well as in fraud detection and data analytics, he said.
What does it have to do with Ripple?
Nothing, is the short answer. The long answer is, it is associated with Ripple in the way that it’s a validation that real-time payment is the “coming wave,” as stated by the former chief market strategist of Ripple, Cory Johnson.
I know the #XRP community is focused on the impact of #Facebook's #Libra, but this #Mastercard deal could be even more important to @Ripple's ecosystem. If nothing else it's validation that realtime payments is clearly the coming wave. https://t.co/hm9dhbk4Rl
— Cory Johnson (@CoryTV) August 7, 2019
To further elaborate, as shared by Dilip Rao, the Global Head of Infrastructure Innovation at Ripple, back in 2008, faster payments are “good for XRP.”
Rao explains how in the world of faster payments, the bank will need to forecast the funding required, unlike the current environment where to find settlements, the sending bank has a day or three to deliver funds.
Companies as well as governments around the world are launching real-time payment systems to speed the movement of money.
This has surely initiated a race among banks and payment networks to capture those flows.
Just this Monday, the Federal Reserve announced that it will build its own real-time gross settlement system for payments in the US. The FedNow Service is set to begin operating by 2023 or 2024 and will modernize the payments infrastructure.
At the time, Warren Paul Anderson, Senior Product Manager at Ripple had said,
“This could greatly help US cross border payments, and thus the work Ripple is doing, because it could (hopefully) speed up last mile transactions in/out of the US.”