Blockchain could help shared device merchants avoid credit card fees, MasterCard says.
MasterCard's Singapore-based subsidiary filed a patent with the U.S. Patent Office detailing a payment system for using hardware devices that specifically mentions Iota's (MIOTA) Tangle technology.
The patent claim, published on Aug. 20, proposes a pay-as-you-go system that uses a "transparent data storage system and aggregation." Users must provide their credentials to gain access to a particular hardware device — the patent cites copiers and 3D printers as examples — and billed strictly for what they used.
The proposed data storage systems could be based on a Tangle or a generic blockchain. The patent makes no mentions of the Iota network or its currency, as the system could also be used in private environments.
The patent claims that such a system would present an improvement over the traditional payment mechanisms commonly used for shared hardware devices. It argues that prepaid cards lock users into the system even if they may not know how much usage they will see, while full pay-per-use "often use attached machines that accept physical currency to operate." These legacy systems may also limit the payment options available to users, the patent notes.
The stated benefits include a higher degree of transparency and trust in the system, the ability to monitor usage in real-time and the elimination of fees associated with credit cards and other payment systems. The patent nevertheless does not explain how users would pay for usage, merely focusing on the technical implementation of such a system. Given the need to record transactions in a distributed ledger, it is likely that some cryptocurrency-like system will be required, which may limit payment options for users as well.
MasterCard has recently been opening up to cryptocurrencies, launching a dedicated on-boarding initiative for crypto card issuers to use the network in July. In May it also entered into a data privacy project together with enterprise blockchain provider R3.
MasterCard was one of the original members of the Libra consortium, but it left the association in October 2019 citing regulatory and business model concerns.