Visa, Mastercard Move to Solve Payment Issues using Blockchain

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November 5, 2018. Two of the world’s biggest payment technology companies are now expanding the use of blockchain technology within its current systems.

Visa’s B2B Connect, a blockchain-based payment service, will commercially launch during the first quarter of 2019. Mastercard, on the other hand, aside from patenting a method that will make crypto payments faster, it is also looking at “fractional reserve banking” on cryptocurrency.


Visa’s B2B Connect that included the Philippines’ Union Bank during its pilot run is now ready to do a commercial launch as early as the first quarter of 2019. This blockchain-based platform will let financial institutions do cross-border business to business payments globally. A process that usually takes a long time, eats too many manpower, and is susceptible to fraud.

“With B2B Connect, we’re developing a new way for businesses to make cross-border, high-value payments – fixing broken processes and breaking down geographic barriers along the way” – Mr. Kevin Phalen, Global Head, Visa Business Solutions

B2B Connect will have digital identity features that will tokenize an organization’s sensitive information such as banking details and account numbers. By tokenizing it, it will have a unique identifier that can be used in facilitating transactions on the platform.


Mastercard recently applied for a patent to the U.S. Patent & Trademark Office (USPTO) for a system to allow merchants to accept cryptocurrencies or what Mastercard called “blockchain currencies”. It will be via a new method of having a cryptocurrency and fiat storage in one.

In addition, Mastercard also wants to use the same principles of the fiat banking system – management of *fractional reserve banking, which is what bitcoin wants to break.

“The use of traditional payment networks and payment systems technologies in combination with blockchain currencies may provide consumers and merchants the benefits of the decentralized blockchain while still maintaining security of account information and provide a strong defense against fraud and theft.” – Mastercard

*Fractional Reserve Banking – is a method used by commercial banks where it is required to keep a portion of a depositors’ money. Example: Juan deposits PHP 10,000 to ABC Bank. ABC Bank needs to keep 10% of Juan’s money, which is PHP 1,000. The remaining PHP 9,000 can be used by the bank as a loan to another person.

This patent completely contradicts what cryptocurrencies want to disrupt – complete transparency and getting rid of debt-based currency.

In July 2018, Mastercard also won a patent that will help speed up cryptocurrency transactions. Its solution is to offer a new type of user account that is able to transact in cryptos using the same systems for fiat.

Read more: Mastercard to Help Speed Up Crypto Transactions

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