MasterCard and J.P. Morgan have come together to create a new B2B payment protocol that could simplify and speed up cross-border transactions. This partnership is meant to integrate Mastercard’s Multi-Token Network (MTN) with J.P. Morgan’s blockchain-based Kinexys Digital Payments platform.
The two financial giants aim to enable real-time value transfers and eliminate the delays traditionally caused by time zone differences and inefficient banking processes.
The B2B payments market, crucial to global commerce, is expected to surpass $120 trillion annually by 2030. However, this vast market has long been plagued by challenges such as slow processing times, high costs, and a lack of transparency.
Traditional systems like SWIFT, for example, rely on manual checks and can take days to complete payments—delays that are particularly problematic for small and medium-sized businesses (SMEs) relying on timely cash flow.
Time zone differences between countries further complicate cross-border transactions, as banks in different regions operate during different hours. This results in payments taking hours or even days to process, causing disruptions for businesses engaged in international trade.
To address these issues, MasterCard and J.P. Morgan have turned to blockchain technology, which has already begun to transform financial services.
Mastercard’s Track and Trace Network (MTN) is a blockchain-based platform designed to facilitate secure, scalable transactions involving digital assets. Launched in June 2023, it aims to enhance payment efficiency within the blockchain ecosystem, focusing initially on tokenized bank deposits rather than cryptocurrencies.
Kinexys, developed by J.P. Morgan, uses blockchain to streamline B2B payments, enabling real-time value transfers between businesses without the need for traditional intermediaries. This approach makes transactions faster, more efficient, and secure, all while reducing costs.
The partnership between MasterCard and J.P. Morgan marks a major step in tackling the long-standing inefficiencies in global payments. Raj Dhamodharan, a senior executive at Mastercard, emphasized that combining Mastercard’s MTN system with Kinexys Digital Payments will enhance the speed and reliability of transactions for businesses worldwide.
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Both companies have been at the forefront of blockchain adoption. J.P. Morgan, for example, introduced JPM Coin in 2020, a digital currency designed to facilitate quick payments between institutional clients. The bank has also invested heavily in blockchain research and development, exploring applications in trade finance, payment processing, and asset tokenization.
In addition to its work with J.P. Morgan, Mastercard has made strides in using blockchain to improve cross-border payments. The company’s MTN system aims to cut down transaction times and fees for international transfers.
In 2019, Mastercard launched “Mastercard Proven,” a blockchain-based platform designed to track the origin and authenticity of goods, improving supply chain transparency.
Mastercard’s commitment to blockchain technology also includes plans to support cryptocurrencies on its network, allowing merchants to accept digital currencies as payment. The company has partnered with various blockchain firms, such as ConsenSys, to explore decentralized applications that enhance payment processing and improve overall system efficiency.
