Mastercard has been granted a US patent for a new process to speed up cryptocurrency payments. The company wants to reduce the limitations of the blockchain, namely the time taken, for a blockchain-based transaction to be processed.
The company says for cryptocurrencies to become widely accepted by merchants, retailers, service providers, and other purveyors of goods and services, the processing time needs to be much quicker. Processing times, currently around ten minutes, should be aligned with that of traditional fiat payment transactions which have processing times measured in nanoseconds.
The document, published July 17 by the US Patent and Trademark Office (USPTO), explains that the company would be offering a new type of user accountable to transact in cryptocurrencies through existing systems for fiat currencies. This account would link a series of profiles able to identify a user’s fiat currency amount, a blockchain currency amount, an account identifier and an address.
The transactions themselves would use the fiat currency’s payment rails and security features, but each transaction would represent a cryptocurrency.
Mastercard also adds that by processing transactions made with cryptocurrencies in this way, “payment networks may be able to evaluate the likelihood of fraud and assess risk for blockchain transactions using existing fraud and risk algorithms and information that is available to payment networks, such as historical fiat and blockchain transaction data, credit bureau data, demographic information, etc., that is unavailable for use in blockchain networks.”
Mastercard is staying ahead of the curve with this latest initiative but has also previously stated it intends to address consumer protection in the space of crypto, having applied for a separate patent last year looking at building refund services for cryptocurrency transactions.
The global payments industry is highly prized, and therefore competitive sector. According to McKinsey, it will be worth $2.2 trillion in revenue by 2020 with an annual five percent growth rate so it is little wonder that Mastercard has recently beefed up its tech team to focus on crypto. Establishing a streamlined global consolidated payment system is a key objective for all players in the sector.
