Mastercard, having filed a patent in March 2018 stating that their current transaction systems are not positioned to meet the needs of 21st century B2B collaborations, is aiming to change its underlying transaction processing infrastructure using blockchain technology. Accordingly, Mastercard has suddenly become very active in blockchain patents. The company recently announced three different patents for business-to-business (B2B) transactions using underpinning blockchain technology.
According to the US Patent & Trademark Office (USPTO), Mastercard is using blockchain to both track B2B transactions, and also to track consumer payments. USPTO reports that Mastercard has identified that digital ledgers, the type of ledger used to conduct blockchain transactions, can effectively record and process transactions enroute from the transaction origin to its final destination.
Mastercard and Distributed Ledger Technology (DLT)
The patent filings, which are listed under “Method and system for recording point-to-point transaction processing,” looks to improve internal account management and make internal records easier to manage. These filings explain that Mastercard wants to use DLT for services that stretch across multiple platforms, enabling secure storage of key data for transactions while also providing a more efficient method of bookkeeping. The new patent is an example used is how blockchain can simplify and monitor buy orders through their entire life cycle.
Mastercard believes the way the blockchain is structured allows data to be better organized, effectively allowing data formats to be easily retrieved. Mastercard, believes that this easy retrieval will be extremely useful for audits because it provides visibility of all participating parties in a transaction. Also, DLT provides Mastercard with an immutable, tamper-proof platform that guarantees reliable data and records.
This is not the first of Mastercard’s blockchain and DLT related announcements as they are trailing just IBM and Alibaba in patents filed. Having roughly 80 patents, Mastercard earlier this year earned a patent that speeds up payment processing by using digital currencies on systems. New user accounts would have the ability to make transactions with already in place fiat currency systems, but with cryptocurrency tokens.
Mastercard appears to have fully embracing blockchain technology and seems to understand the patent race is crucial for competitive advantage. Clabby Analytics believes embracing blockchain technology in any transaction-based business will become a necessity over time. Users are likely to do business with carriers that offer better and more secure services than their competition – and Mastercard appears to know this.