“If you can’t beat them, join them,” the known proverb says. Mastercard seems to have mastered this lesson.
Within the first half of 2018, the American multinational financial service Mastercard didn’t see any positive traits of the growth. This May the corporation’s top financial officer blamed it on cryptos, particularly, on the decline in crypto-wallet funding as banks banned the opportunity to buy cyber assets using credit cards.
And even though governments are struggling to define cryptos – whether they are means of payment, assets or anything else – Mastercard decided not to wait for too long. This week the company got a patent that could allow cyber-money operations on credit cards. This move, experts believe, will validate digital money as a form of transaction.
Mastercard Heading For The Future
One day it might become possible for people to make their acquisitions on credit cards using, for example, BTC as a currency. This might be real thanks to the recently granted patent to Mastercard. On July 17, the company got the right to protect a method that would run "fractional reserves of blockchain currency."
Seth Eisen, Mastercard's senior vice head for communications, told CNBC that currently, users of Mastercard cards are limited. They can pay using money that has been approved by the state and labeled “legal.”
Mastercard Names Drawbacks of Cryptos That Can’t Withstand Traditional Payment
In the meantime, Mastercard wants to diversify the options. In its document, released by the U.S. Patent and Trademark Office, the corporation admitted that people, for who anonymity and safety have been the priority, have been increasingly using blockchain-based currencies.
At the same time, the corporation pointed out in the paper that there are drawbacks of using cryptos as well as the necessity to perfect the storage and processing capability of such financial operations. One of the disadvantages, named in the document, was the limited security for payees. Mastercard explained it by the restraints of the blockchain itself.
Another concern is the time that crypto-transactions take. Usually, they last longer than the conventional ones: 10 minutes versus nanoseconds. Therefore, the company writes in the document, users have to wait for considerable quantities of time, hoping that the transactions are valid.
On top of that, Mastercard stated, because of the anonymity, those, who receive the payment, are at a disadvantage.
The document finalized that due to all these reasons lots of businesses and organizations might be leery to resort to DLT transactions.
Traditional System Fights Blockchain Back?
The novel Mastercard’s method is expected to accelerate blockchain transactions (in case it is adopted). It would be done by letting holders of cards pay for goods on their credit card with a fraction of their cyber-coin immediately.
Concerning the matter, Eisen added that the corporation is always considering the methods that would provide unseen innovations and value for both markets and individual holders of cards. She said that patent is a needed measure to protect the intellectual property of the company without relation to the possibility of the product's launch. Thus, she hinted that there are no guarantees the world would see the new method.
At present, the Mastercard’s representative of leadership said that there have been no products brought to the market ye.
Is It Beneficial For Cryptos?
Some experts believe – yes. One of them is the founder of Fundstrat Global Advisors Tom Lee, who said that such a move sort of ratifies the idea of cyber-currencies as a reasonable form of transaction.
Other Mastercard’s Trials on Blockchain
It is not the first time Mastercard is trying to get into the blockchain industry.
Last month the U.S. Patent and Trademark Office published Mastercard’s application for another blockchain-related patent. Mastercard was looking into the method and system for payment card verification via blockchain.
Mastercard ensured that system with point-of-sale gadgets could be integrated in a way that operations would become more protected. Another curious fact is that the card wouldn’t have to be presented materially, according to the application for patent. Moreover, with these processes, users wouldn’t need to be worried about their payment information.
At the same period of time, Mastercard presented one more idea: a modernization directed at building DLT to permit users to broadcast their travel routes as well as booking requests to merchants.