Mastercard seeks new blockchain-based patent to facilitate B2B transactions
According to the patent application that was made public on September 13 by the US Patent and Trademark Office (USPTO), American financial services giant Mastercard has invented a digital ledger technology (DLT) or blockchain-based system that it believes can simplify business-to-business (B2B) transactions in a high-volume enterprise environment.
According to the patent application:
“Businesses rely on a complex ecosystem of technology, processes, and people internally as well as with thousands of business-to-business (B2B) solution providers and networks to manage their invoices and make or receive payments nearly every day. With the increasing number of entities engaging in financial transactions, the number of electronic payment transactions processed each day continues to grow, with the number often being in the magnitude of hundreds of billions each day.”
“Currently, existing settlement systems often operate using the settlement of individual payment transactions. For example, after a transaction is processed, the issuing bank will transfer funds for that single transaction to the settlement network, which will then forward the funds for that single transaction on to the acquiring bank. Since most businesses are not financial firms, or financially regulated, B2B transactional innovation left payment flows between the parties intact,” it adds.
The financial firm emphasizes the point that the old 20th century B2B payment platforms are finding it hard to come to terms with the phenomenal increase in the number of transactions taking place each day. And this has increased the stress on the processing power of accounting and settlement systems.
‘Systems based on blockchain provide the best solution’
Mastercard argues that there is a need for a uniform payment system that will allow businesses to execute B2B transactions more efficiently, and the firm believes that blockchain or other types of solutions based on the digital ledger technology (DLT) could be an ideal solution for such an inter-enterprise settlement system.
The application goes on to add, “The use of digital ledgers, such as blockchains, may further facilitate the services provided by such a platform, by enabling data to be stored clearly and in a format that is easily auditable by participating entities. In cases where ledgers like blockchains are used, the ledgers may be provided even more benefits as they may be immutable and resistant to tampering, which may further increase the reliability of such data.”
The patent notes that the system could be built on either a public or private blockchain, but, if Mastercard actually does attempt to build it, it’s likely that it would exist on a permissioned blockchain network.
As reported earlier by BC Focus, Mastercard CEO Ajay Banga has many a time made his stance clear about cryptocurrencies in the past. In July, he made it clear in no uncertain terms that these assets are “junk,” adding that he would only be interested in a digital currency developed by the government.
He went on to add, “Why civil society would like to put a snake in its backyard and think that somehow the snake will only bite my neighbor, I don’t get it.”
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