The financial giant MasterCard has always held a two-edged sword when it comes to blockchain and related technologies. Bitcoin, for example, earned ire of MasterCard’s CEO, Ajay Banga who called the cryptocurrency “junk” while questioning its reliability in the real world. However, the company has held a favorable view of Bitcoin’s underlying technology: Blockchain.
In fact, just last month, the corporation announced what it dubbed as “Mastercard Blockchain API” which allowed businesses to make B2B (business to business) payments over Mastercard’s blockchain network. Now, the company is reportedly set to undertake another venture in the blockchain technology. A new patent filed under the company’s name hints at an endeavor that will most likely make use of the technology.
The patent refers to a method for “Instantaneous Payment Using Recorded Guarantees”. Filed on 9th November, the system intends to make merchants’ payments instantaneous, as the name of the patent suggests, rather than having to wait for several days “due to processing, clearing, and settlement times”. Currently, merchants wait for the verification of the transactions made by credit cards before being issued a payment.
Moreover, MasterCard will store records of the said transactions in order to verify the payment of the vendor. The stored records will include the amount paid to the vendor in the transaction, a guarantee of the payment along with a confirmation of the same, and the accounts/profiles of the concerned parties, as suggested by the patent.
An excerpt from the patent’s background reads: “When transacting with a merchant, many consumers elect to use issued payment instruments, such as credit cards and checks, in place of traditional paper fiat currency. While such payment instruments offer a level of convenience to the consumer, such as protections against fraud and theft, accounting of transactions, etc., the use of such instruments can be disadvantageous for merchants.”
While the banks and other financial institutions had tried to curb the issue by issuing guaranteed checks, many merchants lacked the necessary computing systems required to process the guaranteed checks. Additionally, the experience was unwieldy for transactions based on e-commerce and other Internet platforms. It was also extremely ‘inconvenient’ for the users who preferred other means of payments over the checks.
Thus, a need arises for a technically viable solution where transactions are easily and readily verifiable either by the financial corporation or merchant. This will have double the benefits as merchants get their payments instantaneously, and customer needs are taken care of in an efficient manner. This system can also be used with e-commerce and other Internet-based transactions concurrently.
The abstract, itself, doesn’t mention the blockchain technology, but MasterCard is intent on using the technology to realize the potential of this patent. Interestingly, blockchain is mentioned in the description field which affirms the claim further. MasterCard’s latest foray into the blockchain technology only further strengthens its foothold in the tech industry and may as well change the paradigm of the future of several IT-based industries including the commerce industry.