As per a new patent filing, the famous Chinese e-commerce company, Alibaba is considering the use of Blockchain to speed up the processing of international payments. Though the development was revealed on Friday only, the patent application had been filed with the Office of China State Intellectual Property in the month of January itself and is titled “A system and method that adjusts account balance on the Blockchain.”
The company elaborated on its planned usage of Blockchain to facilitate international transactions involving any third-party payment vendor using the broad concept of adjustment of account balances.
According to the patent document, third party payment services and their respective bankers across various regions will be used as the nodes of the proposed Blockchain. Thereafter, every node will maintain a user balance ledger and reflect the accounts in the payment wallets of the third-party vendors. When a transaction request would be initiated, the nodes will check the balance in the user’s payment wallet along with any legal compliances involved. This process would be enforced by encoding smart contracts in the Blockchain.
Then the balance in user payment wallet would be updated by receiving and sending the transaction amount in a decentralized way. This would reduce the delays in the payment and also eliminate the need for an intermediary.
What makes this development interesting is the fact that Alibaba has not yet explained as to how and when it intends to implement this system, the patent document was published soon after a Blockchain based remittance service was announced by its payment affiliate Ant Financial. Ant Financial said that Alipay users in Hong Kong can now send money to residents in the Philippines using their Blockchain based system through a third-party payment vendor. Standard Chartered is the banking partner in this process.
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