To verify payment cards at the point of sale (POS), Mastercard is looking into blockchain technology. In a filing with the U.S. Patent and Trademark Office (USPTO), the company said it has devised a process to send and retrieve payment credentials through a "publicly accessible blockchain,” CoinDesk reported.
Through a two-way method, the system encodes an encrypted payment card image that is stored on the blockchain with a private and public key. When a cardholder makes a payment, the system will utilize a private key to decrypt the card image and verify the payment information. With a solution, the transactions would be secure — as a cardholder does not have to have their card presented — and the cardholder would not need to be concerned about having a payment device skim their card information.
According to Mastercard, "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 company has filed for more than 35 patents in blockchain technology. Last year, Mastercard announced it will be opening up access to its blockchain technology through its developer’s API. (Initially, the technology was to be made available for B2B transactions, specifically to address the demands of cross-border payments.)
Mastercard has also invested in the Digital Currency Group, which incubates cryptocurrency like bitcoin and blockchain-related companies. In addition, the company joined the Enterprise Ethereum Alliance, which connects Fortune 500 companies with FinTech startups, academics and blockchain experts. And, in April, Mastercard announced it was hiring 175 new technology developers, including blockchain specialists, to work out of an office in Ireland.