On Thursday, July 12, the U.S. Patent and Trademark Office (USPTO) published a patent filing that shows that the financial services giant American Express seeking a patent for a blockchain-based proof-of-payment system. The patent application notes that the American Express Travel Related Services will be using a blockchain-powered system to receive “payment confirmation including a transaction amount and a merchant identifier.”
While describing the problem statement, American Express notes that currently there is “limited” number of options beyond a receipt or ticket, in order to provide the evidence that the payment has actually occurred between the merchants and its customers.
AmEx says that it would be mostly public blockchain system which will help in retaining “transaction data, contract data, proof-of-payment data, identification data, and/or other information as desired.” The company says that the public blockchain system would provide an additional layer of proof for all transactions occurring on AmEx’s network.
The blockchain system will automate the proof-of-payment just by encrypting the payload data – like the merchant identity and transaction amount – with a public key on the initial node of the blockchain. The filing notes that this data can further be propagated on the second node of the blockchain. When needed, the data can be fetched using a smart device which would decrypt the payment payload information and match it with the second identifier, which is the customer. The patent filing explains this as:
“A payment processing entity (e.g., a credit card network, bank, debit, bitcoin, rewards points, or ACH) provides evidence of a payment in a tamper-proof manner by writing the proof of payment to a blockchain. A smart device connected to the blockchain may detect the proof of payment, and can extract relevant information. The information may be encrypted on the blockchain such that access is restricted to entities having the correct cryptographic keys. “
The patent filing also further notes multiple use-cases of the system where it mentions that the data can be used “unlock a hotel, rental or shared economy property door using the card (e.g., that was used for the payment) to look up proof of payment on a blockchain.” Additionally, “the system may be leveraged to provide ticketless access to venues (e.g., movie theater, sports event, concert, etc.) to a customer,” and so forth.
The company is currently deciding on whether the blockchain system should be hosted on a private, public or consortium network. However, the patent filing truly highlights the way in which “public networks may leverage the cumulative computing power of the network to improve security.”
The company has been actively working on several such blockchain projects to improve its services. American Express has also collaborated with blockchain startup Ripple for a blockchain-based payments system using its xCurrent solution. Earlier this year in January, American Express started trials on a custom Membership Rewards program for cardholders using the Hyperledger’s blockchain technology.