On July 17, Mastercard won a patent to secure its modus operandi that would administer “fractional reserves of blockchain currency.”
Analysts say that the blockchain technology will stun the financial world by delivering a system for transactions that do not need a central authority, bank or third-party payment system in a more legitimate and secure way. It’s equally important for the credit card institutions to come upfront favoring crypto industry and accelerate the easy flow of bitcoin transactions. This very reason has made many traditional financial institutions unsupportive of the new technology, as over time it could make their systems outdated.
Through U.S. Patent and Trademark Office, Mastercard mentioned in a document that there has been “increased usage” in blockchain currencies by consumers who “value anonymity and security. Also, there is a need to recuperate the storage and processing proficiency of such transactions due to certain hidden disadvantages of virtual currencies.
Seth Eisen, Mastercard’s senior vice president for communications, said, “For now, Mastercard holders can only pay using government approved currency that is declared as legal tender but might be one day the users able to get a charge on their credit cards using bitcoin as a currency for the purchases.
Further, in the document, it is mentioned that, “While blockchain currencies can often provide such safety and security for the payer’s information, such security may be limited for payees, particularly due to the limitations of the blockchain. Due to which both merchants and consumers have to devote a substantial amount of time to these digital transactions to go through and reliability is also an important issue from both the ends to validate the payment. As digital coin dealings are still slower: about 10 minutes for blockchain transactions versus nanoseconds for conventional payments. Many entities, particularly merchants, retailers, service providers, and other purveyors of goods and services, may be wary of accepting blockchain currency for products and participating in blockchain transactions.”
“Although no products have been brought to market yet they are constantly finding out several ways towards improvisations for robust innovations to the market in order to create value for themselves, their customers, and cardholders,” Eisen continued. “Patent applications are part of that process, taking steps to protect the company’s intellectual property, whether or not the idea ever comes to market.”