The big e-commerce guns have been exploring blockchain technology for cross-border payments and will now look to reach new heights with its latest patent filed with the Chinese Intellectual Property Office.
Reducing the time frame for international payments and subsequently removing middlemen will be the goal of the new blockchain system.
The patent titled – A System and Method That Adjusts Account Balance on a Blockchain – states that the proposed system will facilitate cross-border transactions that directly involve third party vendors.
On how exactly this will be done, the patent explained that third-party payment services and banking partners in different regions would agree to constitute the nodes on the blockchain network.
Using the decentralized format, each node will have access to a user’s account balance, as reflected in the third party users wallet.
On the one hand, smart contracts will be at the base of initiated transactions, allowing nodes to quickly verify a user’s balance in compliance with legal procedures before funds transfer can take place.
To complete the transaction, nodes will update the balances on the user account from information directly shared over the blockchain, ruling out the need for a middleman and also promising improved transaction times.
Pending approval of the patent application, the e-commerce giants has not disclosed any plans to commercialize the new service even though this is expected.
On the brighter side granting the new patent will be a new feat for Alibaba who are currently looking to blaze the trail in the blockchain technology era after owning the e-commerce industry in the last decade.
In the past week, the company’s payment platform Ant Financial has also widened its service to allow Hong Kong-based Alipay users to transfer funds to the Philippines courtesy of a new blockchain system.
There is no longer a doubt that Blockchain technology is truly changing the world and would sooner than later eliminate every form of a third party in the remittance industry.
