A patent application has been published by the US Patent and Trademark Office (USPTO) from Mastercard, for a specialist method and system use blockchain for payment verification at the point-of-sale when a card is used to make a purchase. Mastercard have said that they’ve created a process that allows them to send and retrieve payment credentials via a publicly accessible blockchain.
Via a two-way process, this system will encode the encrypted payment card image that the blockchain stores with a private and public key. So that when a cardholder pays for something, a private key will be utilized to decipher the card image, which can then be used to verify the payment information. This means that card payments would be even more secure as cardholders would not need to have their cards to hand, and there would be no risk of a payment device stealing their card information.
Mastercard have said, “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.”
The patent was filed for by Mastercard back in late 2016, with the new approach designed to address the issue of ‘card skimming’ and is designed to be able to ascertain payment credentials from a secure, third-party source via an accessible blockchain.
When chip and pin cards are used and a transaction is carried out, a private key stored in the blockchain will be used by this smart system to decrypt the card image and double check the payment information. This should help to reduce card theft and fraud, increasing customer security.
The concept behind this bold move is that Mastercard would like to decrease the need for their customers carrying payment cards with them, and instead allowing their credentials to be verified by an internal system through a third-party data source. The aim of this process is to greatly improve user experience and customer security.
A statement from Mastercard’s application read: “The use of a third party data source enables an individual to transact safely without concern for their payment credentials being skimmed from their payment instrument, or without having to even carry a payment instrument entirely.
“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.”
This technology could change the face of payment processing forever, thanks to how innovative it is. There is huge potential for massive changes within the payment processing sector, for other brands in addition to Mastercard. Security is always a concern for card companies like Mastercard, and also for customers, which is why this kind of process could be highly successful.