Look Back at Payments Tech’s Q1 Crypto Exuberance

It’s been a rough couple of months for the crypto, with the stablecoin’s $48 billion collapse helping to send bitcoin below $20,000 for weeks, wiping out all the gains made in the 2021 bull markets — and a lot of public enthusiasm along with them.

For the companies that have invested heavily in bringing crypto payments from obscurity to a growing way for merchants to sell their goods while attracting the growing number of customers interested in using crypto, the timing must be frustrating.

Especially because the customers are there. According to PYMNTS’ US Crypto Consumer study, “more than a quarter of high-income consumers say they are ‘very’ or ‘extremely’ likely to switch” to merchants that accept crypto payments.

See also: Crypto investments can turn black to red and back overnight, but owners will still pay

Over the next few weeks, seven payments tech bellwethers will reveal their second-quarter results — potentially providing a good deal of insight into how the current crypto crash has affected people’s willingness to use bitcoin, ether, bitcoin cash, litecoin, and even memes — born dogecoin in the box. Not to mention providing a temperature check on how eager businesses themselves are to focus on crypto right now.

So with that in mind, it’s worth looking at what they said back in Q1, when crypto was certainly down – bitcoin was about $46,000 at the end of March, down about a third – but not nearly as much as it is now, which at $23,000 is about 67%.

Baked

At the time, Bakkt CEO Gavin Michael opened his earnings call by calling crypto one of the company’s core pillars, saying it “has proven that it has staying power, and we’re helping companies catch up.”

The company just launched its Bakkt Crypto Connect product, which allows banks to offer seamless crypto buying and selling within their “trusted banking environment – instead of seeing deposits flow out of their ecosystem to crypto exchanges.” It allows banks to keep customers’ attention and gain the brand advantage of offering a desired service, he said, pointing to critical partnerships with platforms including Fiserv and Finastra.

Another offering was Bakkt Crypto Payout, which allows employers to offer employees – and gig workers in particular – part of their salary in crypto. He also pushed crypto rewards as “a fantastic entry point for crypto adoption.”

Michael added that Bakkt’s expertise includes compliance assistance, noting its best-in-class New York Department of Financial Services (NYDFS) BitLicense, as well as deep experience in compliance and risk management.

Fidelity National Information Services (FIS)

Chairman and CEO Gary Norcross delved into the company’s crypto services in his opening presentation, pointing to a recent partnership with USD coin (USDC) stablecoin issuer Circle — enabling FIS “merchants to receive settlements in USD coin.”

That will make Fidelity National Information Services the “first provider of USDC crypto capabilities,” President Stephanie Ferris noted later in the presentation, pointing to the deal with the No. 2 stablecoin — which is rapidly gaining market share — as an example of FIS expanding its own stake of the crypto vertical.

Noting that the firm “handled for the top four of the five largest crypto exchanges,” Ferris said clients were attracted by “the level of authorizations and fraud rates that we can provide for them … and because we are a large-scale provider for them .”

Major cryptocurrency exchange Crypto.com was FIS Worldpay’s pilot customer for USDC, Norcross said, adding that the service is an example of the company’s “ability to rapidly deploy advanced technologies.”

Norcross also pointed to FIS Capital Markets’ new partnership with Digital Asset Custodian Fireblocks “to enable our clients to store and issue digital assets as well as access decentralized finance,” or DeFi.

See more: Today in Crypto: FIS partners with fireblocks to offer crypto investments

Norcross called FIS “the leading acquirer of crypto,” and pointed to a Q1 win when crypto exchange Currency.com signed on as a customer “after seeing our capabilities and customer service for another crypto exchange,” as well as what he called “ our expansive global reach, which will help them grow their own business.

Fiserv

Fiserv works with crypto assets in a number of ways, but that was largely not on display during the April 27 earnings call. President and CEO Frank Bisignano only mentioned crypto twice.

First, it emerged when he talked about “softness in our bill payment business” as he pointed to sequential growth rates that “continue to improve as we create new use cases like bill payment for FinTechs, including crypto digital wallets” as well as long- term renewals with major customers, including US Bank and Regions Bank.

In response to a question about Fiserv’s go-to-market strategy, Bisignano returned to crypto, pointing to it as one of the “digital sidecars” it can build for clients.

Among other things, Fiserv had just launched a new set of FinTech-focused solutions, AppMarket, which gives financial institutions of all sizes access to cryptocurrency financing, as well as gig economy banking, lending to small and medium-sized businesses and other offers aimed at attracting younger consumers.

Read here: Fiserv launches AppMarket Open Finance, FI/FinTech Collaboration Tool

Global payments

CEO Jeff Sloan dove into crypto during Global Payments’ earnings call on May 2 when he discussed expanding its partnership with PayPal, announced late in Q4 2021, to include support for cryptocurrencies “for the first time, expanding our targeted markets.”

Hot on the heels of that, Sloan announced a partnership with digital asset payments firm Bakkt. Global Exchange would work with Bakkt on “a variety of use cases starting with enabling cryptocurrency redemptions in customer loyalty programs offered by our bank card customers, expanding our banking-as-a-service (BaaS) offerings to include cryptocurrency, and ultimately leveraging issuing technologies to connect virtual debit, credit and prepaid solutions,” said Sloan.

Along with BaaS, this should include linking to virtual, debit, credit and prepaid solutions, as well as “acceptance of multinational merchant payments,” Bakkt said in a release.

MasterCard

Crypto came up quite a bit during Mastercard’s Q1 2022 earnings call on April 28.

CEO Michael Miebach noted in his opening statement that the firm was “leaning into payments innovation in areas such as installments and cryptocurrencies,” before saying that Mastercard had a three-pronged approach to building principled “solutions to support the crypto-economy” and that it was “making significant progress’ in these areas.

First, he said, “helping consumers easily and safely buy cryptocurrencies and NFTs… [and] which enables consumers to spend their crypto holdings on cards and cash out their crypto wallets via Mastercard Send.”

Second was providing identity, cyber and consulting services to companies and other market players, including government work on central bank digital currencies (CBDC). Third, Miebach said, “prepared our core network for direct support of digital currencies.”

Miebach then turned to crypto-credit cards that allow users to spend their cryptocurrency holdings at any network merchant — which accepts cash — noting that New York-based Gemini Exchange’s crypto-reward Mastercard had recently launched.

He also pointed to the Nexo crypto-backed Mastercard launching in several European countries — a major step in crypto credit cards since it’s not a debit card, but a secured credit card that, Miebach said, “uses consumers’ digital assets as collateral to back up their credit limit.” »

Read more: Nexo, Mastercard, DiPocket Launch Card backed by a crypto credit line

Miebach mentioned several other crypto cards launched with several banks in Europe and with Abra, Invesco and Belo in Latin America.

Miebach then pointed to crypto services, noting that Argentina-based online marketplace MercadoLibre had signed with MasterCard’s blockchain intelligence firm CipherTrace — acquired in September — to “bring security and trust to their digital wallet in Brazil.”

More broadly, he added that Mastercard is expanding its crypto and digital currency consulting service with clients including the Wirex exchange. The company’s blockchain-based digital identity, which is a “key priority area.”

PayPal

If you were looking for the word “crypto,” you would have been disappointed by PayPal CEO Dan Schulman’s April 27 earnings call, in which he called Q1 2022 “the strongest in our history,” with spot revenue up 31% and total payment volume up 13 %.

Crypto was not mentioned once. However, PayPal’s digital wallet, where crypto is one of the payment options, is at the heart of the strategy, Schulman said again and again.

Schulman vowed to “double down” on that, saying “that’s where the future of the industry is going. It’s the future of PayPal. That’s the heart of what we’re trying to do from an engagement perspective.”

Speaking about both PayPal and Venmo, he added “we’re working hard to put our digital wallets at the center of consumers’ daily financial lives,” adding that customers who use it “shop 25% more at checkout than users who don’t using the app.”

Visa

Not much was said about crypto during Visa’s April 27 earnings call — it was certainly less of a topic of discussion than it had been — with Chairman and CEO Al Kelly starting by mentioning crypto initially as an area of ​​”significant opportunity in consumer payments “. ,” and that the company continues to focus and work with governments including Brazil to build CBDCs.

He only mentioned crypto one more time, but it was kind of silly.

“Last quarter, I announced the launch of our specialized global crypto advisory practice,” Kelly said. “We have seen interest from hundreds of clients globally and have committed to 30 that already cover their digital currency strategy, product development and their marketing plans.”

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