MasterCard Blockchain Patent – Instant Payment Processing Coming?


It’s no secret that major financial institutions are exploring blockchain technology. Today, however, it became more official as MasterCard filed a patent for its own blockchain-based money transfer solution.

The patent application was spotted by TechCrunch, which published the story on November 14.

About MasterCard's Blockchain Patent

MasterCard’s patent is described as a “Method and System for Instantaneous Payment Using Recorded Guarantees”. Tech jargon aside, that refers to a blockchain-like system offering instant payments.

It’s not exactly a direct clone of today’s blockchain technologies. However, the patent seems to assume that a blockchain-like ledger will be available to store and manage international transactions instantly.

Here’s how the patent explains it:

“A method for processing a guaranteed electronic transaction, includes: storing account profile, each include an account number and balance; receiving a transaction message from an acquiring financial institution via a payment network, the message including a specific account number, transaction amount, and payment guarantee data; identifying a specific account profile that includes the specific account number; deducting the transaction amount from the account balance in the specific account profile; generating a record of payment guarantee that includes the transaction amount and data associated with the payment guarantee data; generating a return message including a response code indicating transaction approval and data associated with the generated record; transmitting the generated record to a computing system via a communication network; and transmitting the generated return message to the acquiring financial institution via the payment network.”

That’s a wordy way of saying that MasterCard plans to use a blockchain-like system to process payments in the future.

As you can see, that abstract doesn’t specifically mention blockchain technology, nor does it mention similar terms like “distributed ledger”. However, MasterCard seems to want to use that technology in the process. During one step in the transaction above, for example, the payment guarantee data will be “stored in the third data element included in the received transaction includes at least a blockchain network identifier.”

The patent also mentions a “public key” or a “destination address” being used to guarantee the payment.

Ultimately, we don’t know what this patent is or how it will be used. Sometimes, companies file patents and never use them. However, we do know that this isn’t the first time that MasterCard has explored the use of blockchain technology. This past October, MasterCard announced a platform that allowed businesses to make B2B payments over a blockchain-based network. That technology was called the Mastercard Blockchain API.

Of course, MasterCard’s CEO has also publicly attacked bitcoin. Just a few weeks ago, CEO Ajay Banga described cryptocurrencies as “junk” – so you win some, you lose some.

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