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Mastercard Patent Would Put Credit Cards on a Public Blockchain

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Payments giant Mastercard is exploring the use of public blockchains in securely verifying payment cards at the point of sale, public documents show.

According to a patent application filed with the U.S. Patent and Trademark Office (USPTO) and released on Thursday, Mastercard has come up with a conveyance and retrieval processes to verify users' payment credentials over a "publicly accessible blockchain."

The document explains that the two-way method first encodes an image of a payment card and then stores it on the blockchain after encryption with a public and private key. Upon a retrieval request when a payment is being made, the system will use the provided private keys to decrypt the image so it can be verified.

By integrating this system with point-of-sale devices, Mastercard says that transactions would be secure, as the card need not be physically presented, and users need not be concerned about their payment credentials being "skimmed" from the payment device.

Mastercard stated in the document:

"The transaction may be conducted via the display of a machine-readable code to the point of sale device, which may further prevent skimming as the reading of such a code can be more easily controlled via control of the underlying display; the display can be easily shielded and is often obscured when in a pocket or purse."

Although whether an actual product will arise from the concept, the work marks a notable effort by Mastercard to utilize a public blockchain to potentially improve a common issue with its core card business. According to some sources, card skimming at ATMs and point-of-sale across all providers sees around $2 billion stolen per year globally.

In addition, another blockchain-related exploration by Mastercard was also revealed in yesterday's patent update, which seeks to build a blockchain to allow consumers to broadcast their travel itineraries and reservation requests to merchants.

Since the broadcasted information will remain visible to the public, it gives merchants the chance to bid for potential customers over the blockchain, potentially changing the existing model of hotel and air ticket aggregators.

posted Jun 11, 2018 by Aviral Singh

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Mastercard says it will launch Mastercard Send in the UK. Mastercard Send is a payment service that allows financial institutions, FinTechs, digital customers and other businesses to send real-time payments to UK bank accounts and also to receive payments by the same means.

Mastercard faces £14 billion anti-competitive card fees claimThe service will connect to the Faster Payments network enabling a variety of use cases such as peer-to-peer (P2P) payments and business-to-consumer (B2C) disbursements.

The new service follows Mastercard’s purchase of Vocalink in 2017, and embodies its vision of a world, not only beyond cash, but beyond cards as well.  This will enable a broad range of payment types including the latest generation of real-time account-based payments, while maintaining an unerring focus on delivering the best possible customer experiences. By integrating Vocalink technology, Mastercard Send will provide an unparalleled payment solution that offers greater choice and convenience to its customers, starting in the UK.

Mastercard has chosen Starling Bank as its strategic partner for settlement services in the UK. Starling manages the funds that are to be disbursed before they are pushed to individual accounts via Faster Payments.

Julian Sawyer, chief operating officer of Starling Bank, a leading challenger bank, said:  “Starling Bank is the only provider of real-time access to faster payments in the UK. This partnership will open up new commercial and business opportunities for Mastercard clients as it enables them to make and receive payments instantly.”

The first UK customer for the service will be Income Group, a payroll-focused payment provider that enables businesses to significantly improve the efficiency and reduce the costs associated with running a payroll by reducing the time taken to pay employees down from days to real-time.

“Mastercard Send will make payments much easier for users, and deliver better value to a diverse range of banks and businesses who regularly make disbursements. Existing direct-to-bank-account solutions – even those using Faster Payments – are often batch-based and hence less timely, giving businesses a real headache when it comes to disbursement of funds,” said Mark Barnett, divisional president of Mastercard in the UK.

Income Group is a perfect example of an innovative new business that is looking to bring the benefits of real-time payments to a wide range of businesses and their employees. Income Group has developed a real-time payroll payment process that enables businesses to send their payroll payments ‘just in time’ rather than several days in advance, providing significant working capital benefits to these businesses.

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FE CREDIT launches MPlus+, a unique digital credit card delivery solution which allows card holders to commence their cashless journey before the physical card is delivered

Vietnams VPBank Finance Company Limited (FE CREDIT) starts with the MPlus+ Card, a unique digital credit card solution as an extension to the existing range of physical card products focused on category entrants.

Issuing to first-time card users across Vietnam, FE CREDIT has a unique challenge where cardholders in far-flung provinces sometimes receive the physical card almost 15 days post-approval.

To bridge this, FE CREDIT has created this unique digital card solution – ‘MPlus+ Card‘. Securely delivered to the cardholder’s registered mobile immediately upon card approval, MPlus+ enables cardholders to commence their cashless journey for e-commerce and card not present transactions instantly.

Mr. Kalidas Ghose, CEO of FE CREDIT said,

“As a market leader FE CREDIT aims to be the issuer of choice for mass-market customers. MPlus+ Card is another example of this endeavour.”

Mr. Arn Vogels, Country Manager, MasterCard, said,

“We are very excited with the launch of the MPlus+ program, the first digital delivery of a credit card in Vietnam.  The key benefit is that consumers will be able to start making online purchases and enjoy MasterCard offers immediately, whilst the delivery of the card will take several days.”

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The new cards will offer accelerated reward points

Starbucks is partnering with Chase and Visa to launch credit cards in February and a stored-value card in April. The chain’s president and CEO Kevin Johnson said customers would rack up reward points quicker in-store in addition to earning points elsewhere by swiping the card at other retailers.

"Starbucks has a very robust rewards program for the coffee obsessed and this partnership with Chase and Visa is an extension of that. While details haven't fully been disclosed, customers should look for perks such as free drinks on birthdays, the ability to order ahead while using the card, and discounts on favorite drinks,” 

“In addition, card holders should look for points that rival or are better than the Chase Sapphire Premium Card, which gives users triple points for every $1 spent on dining purchases," 

To entice other customers who may not frequent the chain as often, Starbucks is slated to introduce cold beverages more often. Nitro cold brew coffee is currently offered in 1,300 U.S. locations, but will be in 2,300 by the end of 2018.

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Asia-Pacific is the largest as well as the fastest growing region for payment card expenditure; growing card acceptance creates opportunity for international card schemes

Growth in spending will be driven by a three-fold increase in merchant outlets

The value of card payments in Asia-Pacific grew by 25% in 2014 to reach $9.0 trillion, accounting for just under half of the global total card expenditure.

The level of cardholding in Asia-Pacific is comparable to most other regions, but usage per card remains low. Cash continues to be used heavily and card acceptance is limited in some countries – Asia-Pacific’s density of outlets to population is far below the global average. The situation is changing, however, supported by official campaigns to encourage card payments and improve acceptance in several countries, for example in Malaysia and Thailand.

Between 2014 and 2020, RBR forecasts the value of payments with cards issued in Asia-Pacific to more than double, to $19.5 trillion, stimulated by almost three-fold growth in the number of merchant outlets, with the bulk of these in China. The growth in value will be uneven across the region because countries are at vastly different stages of maturity: Japan, South Korea and Taiwan have reached maturity in terms of card penetration but India, Indonesia and Pakistan are underdeveloped and still have substantial scope to grow.

Value of Card Payments in Asia-PacificAAA

Source: Global Payment Cards Data and Forecasts to 2020 (RBR)

UnionPay accounts for 70% of Asia-Pacific card expenditure

UnionPay is the largest card scheme in Asia-Pacific and its share of card expenditure rose from 65% to 70% in 2014, reflecting the rapid expansion of the Chinese cards market. UnionPay cards are issued in nine further countries in the region, but less than 1% of scheme spending in the region originates from cards issued outside China. Visa and MasterCard account for 15% and 9% of the value of Asia-Pacific card payments. JCB makes up 2% overall, but has a 22% share in its home market of Japan.

RuPay is the fastest growing domestic scheme

Domestic schemes are issued in almost all countries in the region, but are generally used for cash withdrawals rather than payments and in most cases their share of payments is static or declining. RBR’s study shows that, at a regional level, they make up less than 2% of value. The fastest expanding domestic scheme is India’s RuPay, operated by the National Payments Corporation of India (NPCI). It has seen phenomenal growth since its inception in 2012, with issuers attracted by its lower processing fees and, by the end of 2014, RuPay’s share of India’s card expenditure had already reached 6%.

Share of Card Payments by Scheme in Asia-Pacific, 2014AAAA

Source: Global Payment Cards Data and Forecasts to 2020 (RBR)

UnionPay will face greater competition in its home market

RBR expects UnionPay to maintain its position as the largest scheme in Asia-Pacific, in the short term at least. The scheme’s dependence on China makes it more vulnerable than its competitors to economic volatility and the end of its monopoly on bank card clearing in China has opened up the Chinese market to foreign players. Going forward, UnionPay will face increased competition, with all the international card schemes eager to exploit the potential that a more open Chinese card market presents.

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