Mastercard is making cryptocurrency transactions faster with its U.S. patent win on July 17, 2018. This opens the possibility of more merchants accepting cryptocurrencies soon.
The multinational financial services corp won a U.S. patent on July 17, 2018, Tuesday for a method that will make cryptocurrency payments faster.
According to the document published by the U.S. Patent and Trademark Office (USPTO), it says that although cryptos are now gaining traction in everyday usage versus fiat currencies, it still has a long way to go in terms of payment processing time. This what makes cryptos at a “disadvantage” against traditional payment platforms. A need for improvement in terms of storage and transaction processing that uses blockchain currencies has risen.
In addition, the patent also explains that a blockchain-based transaction takes around 10 minutes to process versus the traditional fiat payment transactions that are done in nanoseconds.
“Therefore, many entities, particularly merchants, retailers, service providers, and other purveyors of goods and services, may be wary of accepting blockchain currency for products and participating in blockchain transactions.”
Mastercard’s solution to reduce transaction times is to offer a new type of user account that is able to transact in cryptos using the same systems for fiat. This account will then link a series of profiles that will enable it to identify a user’s “fiat currency amount, a blockchain currency amount, an account identifier and an address.”
The company added that the transaction will use the traditional fiat payment rails and security features but instead, the transaction will represent a cryptocurrency. By processing cryptos in this method, Mastercard shared:
“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.”
On April 2017, Mastercard also filed a patent to use the blockchain as a method of storing and verifying identity. It says that using the technology as a storage of identity is immutable (can never be changed).