The processing of payments is perhaps cryptocurrency’s clearest raison d’etre. For this reason, financial services companies whose business models focus on payment processing would arguably be first in the firing line if (or when) crypto reaches truly mainstream adoption. The role, if any, that existing financial services organisations might play in that adoption is controversial to say the least, so Mastercard’s latest patent filing may find a mixed reception amongst crypto enthusiasts.
With a market capitalization of $236 billion and annual revenues of over $12 billion, Mastercard is a pillar of the credit card and payment processing sector. The New York-based multinational have already filed a number of blockchain and crypto-related patents, including a proposal to develop a system for processing anonymous blockchain transactions, and are clearly aiming to incorporate fintech into their business model wherever they can.
Yesterday’s announcement relates to the filing of a patent to develop a system which it is claimed can streamline and accelerate the processing of crypto payments. Mastercard claims that whilst crypto offers benefits in terms of anonymity and security, conventional fiat payment systems are still able to process transactions more quickly.
The patent claims that existing fiat payment networks can assist in improving “the storage and processing of transactions” and that a hybrid system can offer benefits over current crypto networks. The patent therefore applies to a type of account which would incorporate cryptocurrencies with conventional payment systems, enabling consumers to use crypto whilst benefiting from the infrastructure of major financial services organisations. Mastercard claims furthermore that such a system could reduce risk and the potential for fraud which it claims is currently an issue in the crypto space.
It remains to be seen precisely how much utility such a system could offer to fast developing crypto and blockchain networks, and doubtless many in the crypto community might question the need for the use of existing fiat infrastructure. That said, it could certainly be argued that the involvement of established financial services organisations adds validity to the space and therefore has the potential to move crypto further towards mainstream adoption.
