Payment processing giant Mastercard is doubling down its efforts to safeguard its customers in a new partnership with technology platform Feedzai. The latest endeavor aims to provide an added layer of security for users transacting with cryptocurrency exchanges.
The Mastercard and Feedzai Partnership
The partnership fuses Mastercard’s CipherTrace Armada with Feedzai’s artificial intelligence (AI) system. CipherTrace is currently utilized by banks to monitor over 6,000 crypto exchanges for suspicious activities. Meanwhile, Feedzai is a “regulatory technology platform” dedicated towards thwarting money laundering and online scam.
The collaboration’s goal is to integrate CipherTrace with Feedzai’s AI straight-up, instead of going through an application programming interface (API). The system alerts Feedzai in real time whenever it sniffs out anomalous crypto transactions. After that, it blocks the suspicious transactions in mere nanoseconds.
Feedzai estimates that around 40% of scams nowadays follow a pattern wherein the funds exit directly from bank accounts or mule accounts to crypto exchanges.
“This will increase fraud detection by protecting unwary consumers, but will also detect potential money laundering activity and mule accounts,” explained Feedzai CEO and co-founder Nuno Sebastio in an interview with CNBC.
“Numerous banks that believe they are preventing illegitimate cryptocurrency transactions are, in fact, only blocking transactions involving the widely recognized and regulated entities within the crypto space and omitting the rest,” Sebastio added.
The RiskOps system of Feedzai monitors over $1.7 trillion transactions yearly. The Portugal and Silicon Valley-headquartered firm applies for 10 patents annually to guarantee the integrity of its platform. Right now, it has around 100 patents for its proprietary software.
Mastercard’s Interest in Crypto
The recently forged alliance with Feedzai is just one of the many advances of Mastercard in the world of crypto. Previously, an internal report leak revealed that the global leader in the payments industry plans to establish partnerships with MetaMask and Ledger.
The move could potentially embed the payment card technology of Mastercard with self-custodial decentralized finance (DeFi) wallets to give users a seamless way to transact using crypto. This will also widen the reach of the company to Web3.
In return, the association of known crypto wallets with a financial powerhouse could open them up to more user base. It likewise indirectly legitimizes cryptocurrencies as mainstream financial assets subject to the same regulations and compliance mechanisms possessed by traditional assets.
Among the other notable projects of the payments platform in Web3 include the Mastercard Multi-Token Network, Crypto Credential, and CBDC Partner Program.
End Notes
The newly-created partnerships of Mastercard to boost its presence in Web3 help it maintain its relevance amid the technological disruptions brought about by cryptocurrencies. It also keeps it at par with the developments of its rival Visa, which is similarly extending its arm in the crypto space.
