Can the Blockchain Speed Up Payment Processing?

bitcoin

We recently wrote about Mastercard embracing the blockchain. Even though the payment provider’s CEO had previously said that “non-government mandated currency is junk,” the company now sees value in the underlying blockchain technology that’s used for cryptocurrencies like Bitcoin and Ethereum.

It appears Mastercard isn’t wasting any time exploring potential uses of the blockchain. They recently filed a patent for a blockchain-based database capable of instantaneously processing payments. If Mastercard utilizes this type of system in the future, it will eliminate the need for merchants to wait days before receiving funds.

In addition to instantaneous payment processing, the patent also explains that this technology will allow Mastercard to keep an ongoing record of transactions and verify that all merchants are paid correctly. The specific stored data highlighted by the patent includes transaction amounts, guarantees of payment, confirmation of payments and account profiles for the parties involved. These account profiles will also store the current balance of each users.

IBM is Eyeing the Blockchain, Too

Two other very large companies recently announced they’re exploring different uses for the blockchain. In October, IBM debuted a new blockchain banking solution focused on helping financial institutions address the processes required for universal cross-border payments. IBM believes their technology can be used to reduce settlement time and lower the cost of completing global payments for businesses and consumers.

UPS, Shipping, Logistics and the Blockchain

By joining the Blockchain in Trucking Alliance (BiTA), UPS is signaling their interest in exploring the potential to increase transparency and efficiency among shippers, carriers, brokers, consumers, vendors and other supply chain stakeholders.

On a less abstract level, experts believe consumers are among those who could benefit from the widespread adoption of blockchain technology throughout the logistics industry thanks to improvements like products arriving more cheaply, quickly and precisely.

This announcement from UPS came just a little more than week before the debut of Tesla’s electric tractor-trailer truck. With a design that reminds many people of Darth Vader, the 18-wheeler has a 400-mile range with 30 minutes of charging. Although UPS, FedEx and USPS have yet to announce if they plan on trying any of the trucks for their shipping operations, Walmart did say they’ve already pre-ordered 15 of the trucks.

Given how many large companies are putting significant resources behind the blockchain, it seems certain this technology will change major aspects of payment processing over the coming years. In the meantime, the best strategy for your business is to work with a processor that’s invested in keeping up with new technology.

If your processor doesn’t seem interested in utilizing new technology or continues to increase your processing fees, it’s worth taking a few minutes to look over our list of the best credit card processors.

 

 

Posted on Wednesday, December 6th, 2017