Author: Gan Jia Ci
One of the leaders in global payments and technology, Mastercard has just won the patent for a blockchain-based system that authenticates coupons.
The patent application, initially filed in November 2016, was approved by the US Patent & Trademark Office (USPTO) on 31 May. According to the patent, Mastercard acknowledges the importance of coupons to encourage business for merchants and entities. However, very often, the coupon redemption can cause a loss for the entity, “where the entity hopes that the loss is mitigated by increased business that results from the use of the coupon”.
The implemented system allows merchants to depress the number of coupon fraud cases and direct discounts towards their target audience more precisely.
According to the patent, the system includes “storing transaction data for a payment transaction, receiving an identification value, receiving a block included in a blockchain, executing a query on the received block to identify a specific transaction value of the plurality of transaction values where the included coupon identifier corresponds to the received identification value and executing a query on the memory to update at least the transaction amount included in the stored transaction data based on the coupon data included in the identified specific transaction value.”
The proposed system assigns consumers to a blockchain address where their payment credentials will be kept in the payment instrument. When they want to redeem coupons, the point of sale gadget will verify the authenticity of the consumers in liaison with the private blockchain system before giving the discount.
Once the payment has successfully been conducted, the coupon will automatically be transferred from the consumers’ wallet into the “burn address” to prevent multiple redemptions of a single coupon, discouraging fraud.
While the main objective of this system is to reduce fraud cases for merchants, it would also assist consumers in getting more valuable coupons with the guarantee that there will only be sanctioned and legitimate redemption of discount coupons as merchants will now be more encouraged to give out valued discounts to their target audience.