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Blockchain-Enabled Efficient near Real-Time Clearing of Payment Card Transactions

The blockchain technology, which is the distributed ledger foundation behind the ‘bitcoin’ cryptocurrency, has already been recognized as a potential enabler for the accelerated velocity of money in almost every sector of the financial industry. It is certainly an interesting technology platform worthy of studying and understanding, exploring and experimenting with due to its underlying immutable storage and ability to transparently distribute transaction data structures between network participants.

As such, the blockchain provides a potential path for legacy financial systems to interoperate, greatly improving the efficiency of their current processes. Central banks, financial institutions and technology firms are all taking a serious look at the various blockchain platforms, evaluating potential use cases and also learning about its potential and challenges through the ongoing PoC projects.

In the payments space, for example, blockchain could enable efficiency improvements of the clearing and settlement in the 4-party payment ecosystem (enabled mainly by Visa, MasterCard-based networks). I have to be very clear right from the start – the solution I am going to present and propose here doesn’t suggest in any way eliminating the role of the central payment networks in facilitating the execution of the payment transactions.

My goal is only to suggest the different ways for how the current 4-party payment network’s clearing and settlement pr ...

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