Mastercard wants to make it easier to buy NFTs, but customer adoption is in doubt

The news: Mastercard partnered with several nonfungible token (NFT) marketplaces and web3 specialists to make it easier for customers to buy NFTs, according to a press release.

Here’s how it works: Public awareness of NFTs—which certify ownership of virtual assets and are stored on a blockchain—is growing, but purchasing them can be difficult.

• Mastercard wants to simplify the user experience by letting consumers use their cards to buy the digital assets on marketplaces, bypassing the usual steps of having to use a cryptocurrency wallet and purchasing crypto first.
• The payments giant partnered with gaming platform The Sandbox, NFT marketplace Mintable, and web3 infrastructure provider MoonPay, among others.

Growth market or just hype? Mastercard sees significant growth potential in NFTs: It wants a slice of a market that it says generated more than $25 billion in sales last year. And by Chainalysis’ data, NFTs weren't far behind the conventional art market’s size in 2021. The list of companies embracing or exploring NFTs already includes the likes of Big Tech firm Meta, investment bank Nomura, Nike, and rival Visa.

But much of the public remains skeptical: YouGov found 41% of US adults had never heard of NFTs, and just 3% of adults in Great Britain said they would feel more positively about a company if it started offering the digital tokens. And those who have gotten involved with NFTs may now have buyer’s remorse: Prices have tanked alongside the rest of the crypto market, and total NFT sales are down 92% from their peak last year, according to the Wall Street Journal.

The big takeaway: Mastercard’s recently filed metaverse trademarks, new partnerships, and earlier Coinbase tie-up will build its presence in the NFT market and the broader digital asset space while also giving a potential volume boost if customers swap crypto wallets for payment cards. The company thinks the demand is there: A recent survey from the firm found 45% of people had purchased an NFT or would consider doing so.

Mastercard can add more flexibility and familiarity to the process of buying NFTs, which could bring in new customers who don’t trust crypto and are put off by blockchain tech’s complexities. But it’s not on a glide path to success: Many still consider the assets to be volatile in value, hard to understand, and largely unregulated.