Bitcoin startup OneBit is looking to bring the digital currency to the masses by enabling users to spend their coins on the Mastercard PayPass network.
The OneBit app was built during Mastercard Masters of Code Competition, a series of international hackathons aiming to gather and find the world's best coders.
While the app is still in its prototype phase, OneBit has already received great feedbacks from Mastercard, founder Toby Hoenisch said.
"We have build a prototype that lets you spend your [bitcoins] at any Mastercard PayPass terminal," he explained.
When released, the app would be free to use, and Mastercard would pay OneBit every time a user pays for a purchase through the app. Mastercard charges merchants a fee to use its PayPass system.
PayPass is Mastercard's attempt to conquer the mobile payment world. Similarly to American Express' ExpressPay, and Visa's payWave, PayPass is an EMV compatible, "contactless" payment feature, which was later incorporated into mobile phones using NFC with the helps of Nokia, AT&T Wireless and JP Morgan Chase.
Although Mastercard has been a perennial industry leader in Processing for more than 40 years, the PayPass network is only available in 30 countries at the time being.
According to Hoenisch, Mastercard is helping them close a partnership with a card issuer. However, the startup is looking to secure funding to back its development.
Mastercard's backing of OneBit comes with surprise considering that the payment processing giant is widely known to be fairly oppositional to bitcoin.
In December 2014, Mastercard's Southeast Asia CEO, Matthew Driver, discredited cryptocurrencies in a video implying that they could not be trusted.
In March, the firm named cryptocurrencies, along with fintech startups, as major competitors in its annual SEC report, stating:
"These competitors include digital wallet providers such as PayPal, AliPay and Amazon, merchants. [...] mobile operator services, services such as mPesa, handset manufacturers, and cryptocurrencies."
Last week, Neteller disabled the bitcoin top-up feature for its Net+ Prepaid Mastercard, mentioning an "internal policy change." The sudden shift disappointed many users. One wrote:
"As a bitcoin user I just got a Neteller card for exactly this purpose… Now you are telling me I can't use it? [...] How does one close an account with you, I cant believe I had to jump thru hoops with verification, waiting [...] for this."
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