Leading global payments service and technology giant, MasterCard, was awarded another blockchain patent. The multinational corporation is currently investigating how it can utilize public blockchain for the verification of payment and security of credit cards. The latest Mastercard blockchain patent will allow the company to achieve the objective of putting credit cards on a public blockchain.
Credit card skimming and other related crimes have been on the rise lately. Statistical data from Fair Isaac Corporation, FICO, corroborates this assertion as the company reported that there has been a 70% increase in the amount of compromised credit and debit cards. MasterCard strongly believes that this new patent will help put an end to credit card skimming and theft.
Based on extrapolations from the patent application documents filed at the U.S. Patent and Trademark Office (USPTO), MasterCard’s proposed system operates by first capturing the image of the payment card before storing it on the blockchain. During the storage process; the image is encrypted with a public and private key. The system will only provide private keys to decrypt and verify the image when the cardholder performs a payment transaction at the point-of-sale (POS). MasterCard intends to incorporate this system of verification and retrieval with point-of-sale devices across the board; this would provide enhanced security and help curtail card skimming fraud.
In an official statement, MasterCard stated that:
“The transaction may be conducted via the display of a machine-readable code to the point of sale device, which may further prevent skimming as the reading of such a code can be more easily controlled via control of the underlying display; the display can be easily shielded and is often obscured when in a pocket or purse.”
Whether or not this blockchain solution will lead to the creation of tangible products is yet to be seen. However, it undeniably offers a lot of merits including secure verification and encryption and removing the need for the physical presence of cards at the point-of-sale since transactions would only occur through a machine-readable code.
Credit card security is only one of the many MasterCard many blockchain ventures; the company recently revealed a project to help fight fake identifies and another one which involves the creation of a travel itinerary bidding platform based on a blockchain system. This MasterCard bidding platform is set to disrupt the contemporary hotel and air ticket aggregator’s model by allowing merchants to receive broadcasts from potential customers detailing their travel itineraries and reservation requests. This would give merchants the opportunity to bid for potential customers over the blockchain.
Statistics have shown that ATMs and point-of-sale providers around the world see a $2 billion loss every year due to card skimming. MasterCard’s proposed blockchain system will certainly curb this problem by securing credit cards for cardholders and providing better security at POS and ATMs. As more companies begin to embrace blockchain technology and integrate it into their financial systems, the finance sector will see remarkable improvements in the areas of service delivery, speed, and security.