Now we are one step closer to paying for our purchases with the help of our credit cards using Bitcoin as a currency. With a view to speed up cryptocurrency transaction processing times, financial services giant Mastercard has filed a patent for a faster payment system to the United States Patent and Trademark Office (USPTO).
As it is said in the document published by the USPTO, the interest in usage of cryptocurrencies is constantly growing. Owing to the nature of cryptocurrencies, especially consumers who value anonymity and security prefer them to traditional fiat currencies.
Nevertheless, in comparison with payments in traditional fiat currencies, crypto payment processing time leaves much to be desired which is an obvious disadvantage of digital assets.
The patent claims:
“It often takes a significant amount of time, around ten minutes, for a blockchain-based transaction to be processed … Conversely, traditional fiat payment transactions that are processed using payment networks often have processing times that are measured in nanoseconds.”
That’s why there is a real necessity to enhance the way of storage and processing of transactions with cryptocurrencies.
Moreover, while cryptocurrencies have great capacities to provide great safety and security for the payer’s information, due to the limitations of the blockchain, such security can’t be guaranteed for payees.
As a result, both parties of the payment process, consumers and merchants, have significant inconveniences with crypto transactions. For this reason, the growing interest to cryptos makes Mastercard consider different variants how this process can be improved.
Now the company has plans to link blockchain-based assets to fiat currency accounts. Mastercard will offer a new type of user accounts through which it will be possible to pay in cryptocurrencies pegged to fiat money.
Such an account will connect a number of profiles that will identify a user’s fiat currency amount, a blockchain currency amount, an account identifier and an address.
Though each transaction will represent a cryptocurrency, all the payment will be carried out on the fiat currency’s payment rails and security features.
What is more, according to Mastercard, such a new method of processing transactions conducted with cryptocurrencies, will enable payment networks to assess the likelihood of fraud and to estimate risks for transactions. It will be achieved through utilization of special fraud and risk algorithms and available data (including fiat and blockchain transaction data, demographic information and so on) that can’t be used in blockchain networks.
Seth Eisen, Mastercard’s senior vice president for communications, commented on their innovative initiative the following way:
“We’re consistently looking at ways to bring new thinking and new innovations to market to create value for us and our customers and cardholders. Patent applications are part of that process, taking steps to protect the company’s intellectual property, whether or not the idea ever comes to market.”
It is not the first case when Mastercard has paid its attention to cryptos and the issues of consumer protection in this field. Last year, it filed a patent for creating refund services for cryptocurrency transactions – the solution most usable for those submitting payments to merchants from, for example, accounts on exchanges, where their funds may be stored along with funds belonging to other people.