Mastercard Turns to Blockchain to Verify Client Coupon

Mastercard Turns to Blockchain to Verify Client Coupon

Financial services company MasterCard obtained a patent for using the blockchain technology in verifying the authenticity of customer coupons. 

The payments giant envisions using this technology “specifically [for] the storage of coupon data in a blockchain to ensure redemption only by authorized individuals and immutability of coupon data,” based on its trademark application with the US Patent and Trademark Office (USPTO). 

This method entails saving details for a payment transaction including transaction amount, receiving an identification value and a block integrated in a blockchain, and executing a query on the received block to determine a certain transaction value, and carrying out a query on the memory to update the stored transaction data. 

Published on Thursday, Mastercard states blockchain can help lower the threat of data manipulation that comes with the utilization of some types of systems for collating coupon data such as those that “have been developed that directly associate a coupon with a transaction account, to ensure that only the specified transaction account is eligible to redeem the coupon.” 

“However, this requires the entity to store data regarding coupons that are associated with transaction accounts, which can be resource-intensive and subject to data manipulation. In addition, the entity must offer a suitable interface for the consumers to access the data storage to identify what coupons have been associated with their transaction account,” the firm explained. 

“Thus, there is a need for a technological solution whereby coupons can be issued to an individual for redemption only by the individual, and where the system relies on a publicly accessible data source to enable implementation without the use of additional resources for the issuing entity,” it added. 

Merchants, manufacturers, retailers, and other entities offer coupons and other related deals to expand their customer base. Coupons can be used to do more businesses with a customer or gain a new client. 

The redemption of coupons, which have been issued to the general public, often result in in a loss for the entity. A massive redemption of the coupon can lead to “significant, and sometimes catastrophic, loss that cannot be offset by any related increase in regular business,” Mastercard described. 

“As a result, some entities have begun to issue unique coupons that may only be redeemed once or a predetermined number of times, such that point of sale systems can recognize earlier redemptions of the coupon and prohibit future redemptions once the number has been reached. However, while this may limit the number of redemptions, there is no guarantee that the coupon will not be shared or transferred to unintended recipients, prohibiting the entity from reaching their desired market,” it added. 

In recent months, Mastercard has been furthering its blockchain-related development resources as part of its wider technology plan. 

“We’re driving projects that promote financial inclusion at home and abroad, and are working to provide consumers, businesses and governments with the most innovative, safe and secure ways to pay,” Sonya Geelon, Mastercard Ireland’s country manager, said in April. 

The financial institution previously announced it was hiring 175 new technology developers including blockchain specialists. 

Geelon said they would be developing their office in Leopardstown, the location of Mastercard Labs, its research and development unit. Specifically, they would work on designing more efficient payment systems. 

In 2016, Mastercard unveiled a series of experimental blockchain-based APIs to give developers the opportunity to work on emerging technologies which have not yet been commercialized by the company. These programs should be used to process business-to-business transactions, it said last October.  

Mastercard blockchain lead Justin Pinkham had stated the firm is continuing to pursue usage of the technology while promoting for collaborations which may be applicable to Mastercard’s entities. 

“We believe that there is a role of blockchain in the future of commerce. This future needs to be developed in partnership with banks, merchants and industry participants,” he continued.

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