Applications and Use Cases

MasterCard Files Patent to Put Credit Cards on Blockchain

June 08, 2018

Despite being openly opposed to Bitcoin, MasterCard has not been shy about its feeling that blockchain should have a significant role in the future of the payment industry.  In fact, the company has been actively driving the integration into payment solutions, including adding blockchain specialists to its developer base.  

MasterCard’s latest initiative revolves around a patent application filed with the USPTO  involving payment card verification via public blockchain.  According to the filing, the proposed system would store a captured image of a payment card on the blockchain, encrypting it with both public and private keys.  A point-of-sale (POS) transaction would initiate retrieval of the card image to verify the payment using the assigned keys.

The key and payment credentials for the account would be transmitted via a machine-readable code from the cardholder’s mobile device, to an input device – a reader, similar to existing POS card readers.  The data would then be transmitted to and verified over the blockchain-based authentication system, increasing security of the transaction process.

Diagram of the Proposed System from MasterCard's Patent Application

Removing the need for a physical card for transactions would help significantly reduce data and identity theft from skimming at POS locations.  Skimming results in some $2 billion being stolen annually and can cause ongoing hardships for victims. 

If realized, the more secure transaction platform could potentially be used to build a more secure e-commerce infrastructure.  The volume of online transactions will only continue to climb, creating more opportunities for hackers and thieves.  A blockchain-based verification process applied to e-commerce transactions may not prevent thieves from creating fraudulent accounts using stolen data, but it would help reduce unauthorized purchases online.

Edited by Erik Linask



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