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Mastercard Applying for Patent for Instant Blockchain Payments Processing

Credit card giant Mastercard has filed for a patent to use the blockchain as a means of simplifying payment settlement times.

The United States Patent and Trademark Office recently released the patent application. Mastercard described a blockchain-based database that can instantaneously process payments, thus guaranteeing that merchants don't need to wait for a few more days before receiving funds for their products.

Additionally, the filings show that the emergent technology would help the company keep track of all these transactions, verifying that a vendor was actually compensated after a specific sale.

“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.

“For instance, it may take several days for a merchant to receive funds for a transaction conducted using an issued payment instrument due to processing, clearing, and settlement times, whereas transactions conducted using paper fiat currency enable the merchant to possess the funds immediately. The use of issued payment instruments can also be disadvantageous for merchants as there is often no guarantee that the transaction will successfully clear, leaving the merchant at risk of receiving no payment at all if the consumer does not actually have the funds,” the application rationalized.

The data being kept would include the transaction amount, a guarantee of payment, confirmation of the payment and account profiles for the parties involved. These account profiles would also store each user’s balance report, according to the application.

“There is a need for a technical solution where a payment transaction can be guaranteed in a manner that is readily verifiable by an acquiring financial institution and/or merchant, and where the guarantee can be used in conjunction with multiple types of payment instruments as well as multiple transaction types, including e-commerce transactions,” the application claimed.

Mastercard has been consistent in their consideration of blockchain platforms to facilitate payments. Just last month, the company declared it was allowing access to the blockchain tools it was developing in order to expedite business-to-business transactions.

An earlier patent application released in September likewise concentrated on storing payment histories using a blockchain.
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