You pay for your shopping in your local currency, let’s say USD. By using a new Mastercard patent, your USD is then converted into crypto. The benefits of this? A faster, cheaper transaction. Then, your payment is then converted back into USD, ready for the merchant to receive the end payment.
Whilst it might not seem advantageous from the outset, it is a very useful idea, one which will encourage a flow of cryptocurrency and of course, make way for an economical FIAT payment system.
According to The Motley Fool:
“The solution offered by Mastercard is a hybrid system that’ll incorporate blockchain currencies, but allow them to be transacted on traditional payment channels. Why stick with traditional payment channels and not use blockchain? For starters, it’s all about speed. Mastercard believes that using traditional channels would allow transactions involving cryptocurrency to be processed considerably faster than with blockchain.”
See the full article for yourself, here.
Earlier this month, Mastercard received a patent for such a product, one that will enable ‘the linkage of blockchain-based assets to FIAT currency accounts’.
According to the patent, one of the main advantages of such a system is the intrinsic security benefits that this new system could facilitate. Furthermore, according to The Motley Fool:
“Payment networks may be able to evaluate the likelihood of fraud and assess risk for blockchain transactions using existing fraud and risk algorithms and information that is available to payment networks, such as historical fiat and blockchain transaction data, credit bureau data, demographic information, etc., that is unavailable for use in blockchain networks.”
Mastercard and blockchain are by far one of the companies that wish to spearhead a revolution within the traditional payments-sphere. It’s big news because Mastercard are huge, this is hardly a revelation though. Yes, they have a large customer base but the vastness of the Mastercard brand, stamped onto new and emerging technology is the important thing here.
Moreover, Mastercard seem to have developed a system that can and will incorporate both crypto and FIAT currencies, in a format that is totally user friendly and acts mostly behind the scenes, to ensure cheaper, faster and safer money transfers between customers and merchants. This is the essence of cryptocurrency adoption. This Mastercard patent could be the first step in the ladder towards that.