The new service was launched during the Money20/20 Hackathon in Las Vegas after testing and validation had been completed. According to the company, Mastercard’s blockchain solution “provides a new way for consumers, businesses and banks to transact and is key to the company’s strategy to provide payment solutions that meet every need of financial institutions and their end-customers.”
Mastercard wants to provide an easy-to-use, permissioned platform to its network of developers and partners, designed for privacy, flexibility and scalability. According to the company, Mastercard’s blockchain technology platform provides privacy by ensuring that transaction details are shared only amongst the participants of a transaction while maintaining a fully auditable and valid ledger of transactions; flexibility by providing the blockchain APIs and a wider suite of Mastercard APIs, with software development kits available in six different languages; and scalability to commercial processing speed. Mastercard emphasizes that its blockchain technology is integrated into the company’s widely popular payment network.
At this moment, the Mastercard blockchain website for developers states that, due to an overwhelming amount of interest in Mastercard’s blockchain, “We are limiting access to our API documentation to a select audience at this time.”
Besides specific use cases such as Proof-of-Provenance and vehicle service history, Mastercard notes that the global market opportunity for peer-to-peer (P2P) bank transfers is $16 trillion. Mastercard intends to take advantage of blockchain technology and the Mastercard Settlement Network to transfer funds between bank accounts.
“The Mastercard Settlement Network reads the blockchain and will transfer the funds between two banks,” stated Mastercard. “It then writes a confirmation of transfer to the Mastercard blockchain.”
According to Mastercard, the company operates the world’s fastest payments processing network, connecting consumers, financial institutions, merchants, governments and businesses in more than 210 countries and territories. Besides developing its own blockchain platform, Mastercard had previously filed for over 35 patents related to blockchain technology, invested in Digital Currency Group and joined the Enterprise Ethereum Alliance to explore the possibilities of Ethereum technology across a wide range of potential use cases.
“This move comes as a bit of a surprise, as Mastercard previously issued a blanket rejection of Bitcoin,” reads a commentary published in Futurism. “Still, Mastercard’s blockchain service heralds what Ethereum co-founder Vitalik Buterin described to be blockchain’s potential to replace credit cards.”
It appears that the payment processing giant, realizing that blockchain technology is here to stay and disrupt the credit card industry, is accelerating its blockchain-related plans. Last week, Mastercard filed a new patent for a “Method and System For Instantaneous Payment Using Recorded Guarantees.”
While it may seem that Mastercard is trying to patent blockchain technology itself, the filing is more specific and targets fast, verifiable and guaranteed payments on a blockchain network.
Mastercard noted that, while fiat currency enables merchants to receive instant payments, it may take several days for a merchant to receive electronic payments due to processing, clearing and settlement times. On the other hand, credit cards are more convenient for consumers. Therefore, according to the filing, there is a need for a technical solution that allows merchants to receive instantaneous, guaranteed electronic payments while maintaining a high level of consumer convenience.
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