Payments giant Mastercard is now speeding up cryptocurrency payments. In the age of cryptos, the company could no longer ignore the opportunities around the new digital currencies. Tuesday, their blockchain patent was approved.
Mastercard saw the opportunity in the transaction speed issue of popular cryptocurrencies. The document stated that cryptocurrencies have "seen increased usage over traditional fiat currencies by consumers who value anonymity and security," the wide disparity in payment processing times between the two classes of assets puts cryptocurrencies at a "disadvantage."
"There is a need to improve on the storage and processing of transactions that utilize blockchain currencies," the patent claims.
Bitcoin and other commonly used cryptocurrencies take around ten minutes or more to confirm transactions. This makes them very unattractive to businesses since prices can change during that span of time. On the other hand, transactions with fiat making use of payment networks measure transaction speeds by nanoseconds. The gap here is clear, and Mastercard leapt at the opportunity.
To achieve low transaction times for cryptocurrencies, the company will offer users a special type of account where cryptocurrency transactions are possible through the use of existing systems for fiat. This would then subject the transaction to requirements for fiat transactions – currency amount, account ID, and address.
Not only does Mastercard speed up transactions, but it also allows blockchain transactions to leverage the fraud and risk algorithms that come with the fiat payment networks.
“Existing payment systems are often configured to perform complex calculations, risk assessments, and fraud algorithm applications extremely fast, as to ensure quick processing of fiat currency transactions. Accordingly, 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 the security of account information and provide a strong defense against fraud and theft,” the USPTO document read.
This is not the first time Mastercard has been involved with a number of blockchain patents. Just last 2017, the company released an API for fiat payment processing leveraging blockchain technology and a “method and system for integration of market exchange and issuer processing for blockchain-based transactions”.