MasterCard Wins Patent to Use Blockchain Technology to Eliminate Coupon FraudJun 1, 2018, 3:00PM
The App will protect merchants from coupon fraud and offer target customers secure and verifiable coupons the assure them of discounts
The United States Patent & Trademark Office (USPTO) has granted MasterCard Financial Services a patent that enables them to use blockchain technology to clamp down on coupon fraud.
The patent, which the credit card giant applied for in November 2016, was granted on May 31, 2018. It provides a framework for merchants to eliminate coupon fraud as well as being able to issue discounts to target customers based on merit.
The proposed application will assign customers a blockchain address and store their credentials in payment instruments such as digital wallet applications or credit cards. The POS device will interact with the merchant’s private blockchain network anytime a user tries to redeem a coupon in order to validate the customer’s viability to receive the discount. Once a transaction is completed, the application will add the particular coupon to a “burn address”, which is an archive for validated coupons so that the coupon gets blacklisted and can no longer be re-used or shared with other people.
Blockchain in the Credit Card Industry
The breakthrough comes at a time when American Express is also using Hyperledger’s blockchain technology to create a more versatile Membership Rewards Program. The new technology, which targets individual items, was previously impossible as all inventory systems were similar. It will enable merchants to create product-targeted offers. Merchants that have had a hard time maintaining their customer base or tapping into new markets can now create and offer bonus points for individual products as well as avoiding losses caused by coupon redemption fraud.
For his part, MasterCard CEO, Ajay Banga, was quoted as saying the company will support future government-backed cryptocurrencies, however, he still believes that “non-government mandated currency is junk.”
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