Mastercard was awarded a patent on July 17 for a method that would allow cardholders to make purchases on their cards using Bitcoin. The news came through a U.S. Patent and Trademark Office document, which cited the card issuer’s rationale for its decision and digital currency concerns.
The document noted blockchain currencies’ “increased usage” by consumers who “value anonymity and security.” It also discussed the need to improve storage and the means of processing these transactions.
For example, currently, digital coin transactions take longer – about 10 minutes for blockchain as opposed to traditional payments’ transactions in nanoseconds. Because of this time lag, merchants and consumers have to wait for digital transactions to complete – or the seller just has to trust the payer that the transaction will in fact go through, CNBC reported.
And when it comes to trusting the payer, blockchain’s anonymity can be disadvantageous for those who accept payments, according to the document. This very feature might make people – especially merchants or retailers – wary of accepting blockchain currency as payment.
Mastercard and Payments
Today, Mastercard holders can use currency deemed by the government as legal tender when paying for things, Seth Eisen, Mastercard’s senior vice president for communications, told CNBC. With the patent now in place, the next steps are yet to be revealed. However, if the method enters the market, blockchain transactions could be faster, as cardholders would be allowed to pay instantly for items on their credit card using a fraction of their digital currency.
Eisen added that currently, the company hasn’t taken any products to the market. However, this isn’t Mastercard’s first patent, as it has previously acquired many cryptocurrency-related patents, reported Bitcoin.com. Earlier this year, the company said it will only support fully-regulated, central bank-issued, non-anonymous coins.
However, Ari Sarker, co-president of Mastercard’s Asia-Pacific business, told Financial Times in March that Mastercard was undertaking cryptocurrency pilot programs in Japan and Singapore, which enabled some clients to “cash out” of bitcoin onto a card.
Author: Debbie Baratz
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