In the latest blockchain news here on DC Forecasts, one of the biggest financial services giants out there, Mastercard, has recently invented a new blockchain system that according to the company, can simplify the business-to-business (B2B) transactions in the high-volume enterprise environment.
The system is outlined in a series of patent applications filed by the multi-national firm in March – all made public on Thursday by the US Patent & Trademark Office (USPTO). As described in the patent, the existing settlement systems do not scale well to the needs of the 21st-century businesses.
The patent reads the following:
“Currently, existing settlement systems often operate using the settlement of individual payment transactions. For example, after a transaction is processed, the issuing bank will transfer funds for that single transaction to the settlement network, which will then forward the funds for that single transaction on to the acquiring bank. Since most businesses are not financial firms, or financially regulated, B2B transactional innovation left payment flows between the parties intact,”
It also touches the strain on the processing power of settlement systems:
“As a result, 21st century B2B collaboration sits on an unwieldy, unconnected and largely unchanged mid-20th century B2B payments platform. As the number of transactions being processed, and therefore settled, increases, the strain on the processing power of settlement systems and those of financial institutions increases, as well as the number of fund transfers that must occur every day.”
With this, Mastercard is certain that there is a need for a more uniform payment system that would allow businesses to execute B2B transactions in a more efficient way. As the company believes, a blockchain or any other type of digital ledger could be the ideal solution for such an inter-enterprise settlement system.
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