MasterCard had filed for a patent that has been granted which includes rights for a method that would manage the blockchain currency in fractional reserves. This is the latest patent of MasterCard and this indicates that cryptocurrency credit cards would soon be viable for purchasing different goods. The method, as per the filing, would address storing crypto as well as fiat currencies under a single profile. Users would be able to link these two types of accounts with their bank.
The patent that has been filed explains how users prefer to use cryptocurrencies due to the anonymity aspect which offers greater security than fiat currencies. The company believes that many customers feel that this will help prevent fraud in which digital currencies are on the rise.
MasterCard, however still feels that cryptocurrencies keep customers open to the risk of being tracked and hacked into their funds as well as open such risks to receivers of such funds. Fiat payments are usually processed in seconds while crypto transactions take ten minutes at least. Hence, using cryptocurrencies at retail stores would still pose problems such as delayed confirmations.
The other obstacles are that many are still overwhelmed by the concept of cryptocurrencies and how blockchain works which are so different from the paper money and coins that are traditional fiat currencies. Hence, using such systems or even combining the two could take several years to have acceptance amongst all kinds of customers. However, with such a move the adoption of using digital assets will certainly be promoted as well as retain the benefits of the decentralized technology.
Many cryptocurrency based platforms already have such cards on offer that include best Bitcoin wallet features as well. It remains to be seen, however, how MasterCard will get this implemented. There is no mentioned as to whether they would have a blockchain system of their own to support such functions. As per communication released by the company to CNBC, the filing of patents is part of the process to innovate and protect the intellectual property of the company. MasterCard is also looking to combine cryptocurrencies with traditional systems of payment as it would also help to combat fraud besides providing convenience to the masses. The system would be based on risk algorithms and fraud prevention techniques which would look into how cryptocurrency transactions can be legitimized. At the same time permission would also be given to the digital assets to information such as data of the credit bureau, demographic information and fiat transactions and their history.
There are several blockchain technology-based solutions that MasterCard has been looking into and filed patents for. The company has already filed patents for an anonymous blockchain transaction method as well as a bidding system for travel itineraries that would also be blockchain-based. However, these could also be ways to secure processes and systems by MasterCard without any plans on developing them in reality.
For instance, the patent that was filed by MasterCard for a blockchain-based bidding system for travel itinerary was awarded by the US Patent and Trademark Office on June 7th. This patent is aimed at streamlining the transactions across the global travel sectors. It would help to connect travelers across a wide range of hotels, transportation systems, and other services. This would help link to popular services like Kayak, Hotels.com and Priceline.
The proposed system would allow travelers to submit details of their travel itineraries that would include blocking and broadcasting the same across network connected nodes. Merchants would be able to submit bids when reservation requests are made on the system. These would be evaluated and sent back to the travelers. The bidding process would enable travel providers to make necessary adjustments so that they can earn the business they want. Travelers, on the other hand, would also get the best deal possible with respect to their travel requirements. Travelers would see benefits like saving money and time while travel providers would find more ways to earn as well as increase revenue.
This system would help to increase efficiencies in the system. Indeed MasterCard has been one of the active investors in research-based on blockchain technology. While the firm has received a patent for this unique travel bidding system, it has also won a similar patent for a blockchain wallet system that would authenticate coupons and provide customers with the right kind of coupons and discounts from different merchants.