MasterCard has announced upgrades to how it’s payment processing operations will operate for business to business transactions. The company will now allow businesses to use blockchain technology to transfer money via its MasterCard Blockchain API, which recently debuted at the Money20/20 Hack-a-thon in Las Vegas.
MasterCard has joined the growing list of companies taking advantage of blockchain technology such as Google, Citibank, Goldman Sachs and others.
Unlike Bitcoin, MasterCard’s blockchain technology does not rely on a cryptocurrency to operate. Instead, transfers currencies in the same way as bitcoin, with full ledgers included. In this way the sender and receiver have records of the transaction included with the currency itself. MasterCard says the blockchain transfer is safer and faster than the existing system. MasterCard ensures that the new blockchain technology used to process the payments is only shared between those who are participating in the transaction, with the blockchain guaranteeing that there is an accurate record of the payment.
MasterCard is currently using the technology in business to business transactions in order to address international payment processing needs. The technology could make it less expensive for businesses to pay international bills. When money is sent overseas, it usually passes through several banks before arriving at its final destination and is hit with fees all along the way. MasterCard’s technology could directly connect the buyer and seller, allowing for the money transfer to be completed in a more timely manner.The technology can be used to move more than just the transfer of money, according to MasterCard. It can also be used to track pharmaceuticals and luxury items such as handbags and diamonds by providing what is known as a proof of provenance (Documented evidence of provenance for an object can help to establish that it has not been altered and is not a forgery, a reproduction, stolen or looted art.).
The technology can be used in conjunction with other MasterCard API’s for application development purposes and is software development kits are currently available in six languages. The ability to send money via the new technology is currently unavailable to the average MasterCard credit card holder.With more than 35 patents on file for the cryptocurrency technology, MasterCard is the second Fortune 500 company to use the payment method and has a settlement network of 22,000 banks and other financial institutions with offices around the world.