Mastercard Patent Would Put Credit Cards on a Public Blockchain

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.

Mastercard image via Shutterstock