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Mastercard Joins with Bakkt to Facilitate Crypto Card Payments

The idea is to let consumers buy, sell and hold digital assets through the use of crypto debit and credit cards. Bakkt shares soared.
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Payment services titan Mastercard  (MA) - Get Mastercard Inc. (MA) Report and cryptocurrency custodian Bakkt (BKKT) announced a partnership Monday to facilitate cryptocurrency debit and credit card payments.

Mastercard shares rose modestly after the news, up 0.7% to $361.19 at last check. But Bakkt skyrocketed 162% to $24 at last check.

The partnership will “make it easier for merchants, banks and fintechs in the U.S. to embrace and offer a broad set of cryptocurrency solutions and services,” the companies said. “Consumers, in turn, will experience expanded access to the digital asset ecosystem.”

They said, “Mastercard partners will be able to offer cryptocurrency solutions.

“These include the ability for consumers to buy, sell and hold digital assets through custodial wallets powered by the Bakkt platform and streamlined issuance of branded crypto debit and credit cards.

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“Mastercard will also integrate crypto into its loyalty solutions, enabling its partners to offer cryptocurrency as rewards and create fungibility between loyalty points and other digital assets.

“This means that consumers can earn and spend rewards in cryptocurrency instead of traditional loyalty points and seamlessly convert their crypto holdings to pay for purchases.”

Morningstar analyst Brett Horn puts fair value for Mastercard stock at $337.

“Mastercard has multiple characteristics that should draw investors’ attention,” he wrote in August. “We think a wide moat surrounds the business and view Mastercard’s position in the current global electronic payment infrastructure as essentially unassailable.”

But the company has issues, Horn said. “Cross-border transactions, which are particularly lucrative, came under heavy pressure due to the fallout from the pandemic,” and recovery could take a few years, he said.