Credit card fraud of any kind, just might get a little harder thanks to Mastercard’s current Blockchain project. Last Thursday, a patent application went public that shows that MasterCard is experimenting with a public blockchain, which it hopes will improve the identity verification process related to credit card ownership.
More specifically, this possible solution is intended to be used when a customer attempts to make a purchase, ostensibly to prevent someone using a credit card that does not belong to them.
From 2012 to 2016, in the USA, 13 million customer complaints were reportedly filed with the Federal Trade Commission and 42 percent of them were related to credit card fraud. According to an outside report on the subject, this actually means that 1.3 million of all of the customer complaints had to do with this.
The question mark that this raises related to Mastercard’s Blockchain project is that the majority of these credit card related complaints apparently began with telephone conversations in which the offenders stole the data from their victims.
Because of how Mastercard’s future Blockchain will function, even these instances of fraud will be able to be prevented, if everything goes according to their plan.
Judging by CoinDesk’s report on the subject as well as the patent application, it all begins with the user uploading an image with his or her payment card to the Blockchain, which is then encoded and encrypted with public and private keys, similar to how a Cryptocurrency wallet looks.
In connection with this, it’s important to note that the payment card’s data is never accessible until a payment is initiated. Just like what Cryptocurrency networks aspire to be doing, the MasterCard Blockchain aims to work anywhere that Mastercards are accepted, as of now.
Once a payment begins, for example, in a retail store, the Blockchain will be able to decrypt the picture of the payment card, apparently with the private keys of both parties, who are involved.
This effectively means that their core users are any MasterCard holders as well as any businesses that accept MasterCard, which signifies that their Blockchain could possibly become the biggest yet.
As any Blockchain project gets bigger, concerns related to its security become more serious as well. To combat this, MasterCard cites the importance of using a different kind of encrypted code, called machine-readable code, to send each transaction through a point of sale device.
In the end, this project could be the one to revolutionize traditional payments, except for one caveat. While on the one hand, MasterCard claims that the whole process will be completely secure and impenetrable, they add that all “broadcasted” information can be seen by anyone.
If this is in fact, the case, then questions arise related to how this is any different from a company selling customer data for profit, such as this year’s scandal with Facebook.
Even more credence is added to this possibility in Coin Desk’s report, which suggests that merchants will be able to sell certain parts of customer payment data for profit. If these ethical concerns are ironed out, then again, this could be the specific project that moves the Blockchain even closer to fully taking over the financial world.
By: BGN Editorial Staff