In about 2014, most bitcoin companies quickly pivoted to the “next big thing”: blockchain. Among them were the financial and fintech houses that were eager to avoid SEC scrutiny of their cryptocurrency holdings but were happy to use blockchain technology to speed up transaction times. Many of those early efforts are now apparently bearing fruit.
MasterCard, for example, has just filed a patent for a “Method and System For Instantaneous Payment Using Recorded Guarantees.” This is, in short, a patent for a blockchain-like system that offers instant payment. It is not a clone, per se, but a patent that assumes that a blockchain-like ledger will be available to store and manage international transactions instantly.
The patent describes:
- 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.
While the abstract itself doesn’t mention blockchain, MasterCard intends to use the technology in the process, describing a step in which “the payment guarantee data stored in the third data element included in the received transaction message includes at least a blockchain network identifier and (i) a public key or (ii) a destination address, the record of payment guarantee is a blockchain transaction for payment of the transaction amount stored in the second data element included in the received transaction message to (i) the destination address or (ii) a destination address associated with the public key, and the computing system is a node in a blockchain network corresponding to the blockchain network identifier.” That’s definitely a mouthful, but it basically means they’ll store a record of the transaction in some immutable form.
MasterCard has explored blockchain tech before even as its CEO attacked bitcoin publicly. This tendency to cut the cryptocurrency out of a blockchain discussion is not new and it’s not stopping any time soon. Whether it works, however, is a different question.