MasterCard talks tokenisation, Bitcoin and biometrics

Financial services networks wield great power across the planet but they are also peppered with points of vulnerability and tend to exclude many people who don't have access to bank accounts. The complete circumvention of these factors is what makes the Bitcoin network so interesting and unique.

MasterCard has been doing its best to address issues like financial inclusion with lots of innovation in places like Africa. And of course like all card providers, it is engaged in a running battle to keep fraud on the network to a minimum.

IBTimes asked Ann Cairns, president of international markets for MasterCard for her views about the vision of seamless, global financial integrity promised by a system like Bitcoin.

She said: "Bitcoin in its current incarnation is slow in the sense of being able to do a transaction and have it properly authenticated, which can take quite a few minutes.

"It doesn't really work in today's fast paced shopping environment; even more so in train stations and so on when you have got millions of people trying to go through turn-styles – there you need real time, instantaneous authentication and delivery.

Cairns said digital currency will certainly be part of the ecosystem. "I mean you already have them in various countries around the world, Mint in Canada for instance - that's a regulated currency.

"Once you start moving money around in significant tranches, I don't see that the world's financial systems will allow that to continue unregulated. It would be difficult for economies to run themselves, if that was the case.

"In terms of regulation, in terms of law and order, in terms of the way people run their economy on any massive scale - Bitcoin will have to evolve and change in order to have massive global adoption.

"I think blockchain is something that everybody is looking at around the world whether it's banks, whether it's the network - certainly it could have a very interesting future. But it's not the panacea right now.

In terms of have a seamless, global system, Cairns argued the card network can do that today.

"Your card will work at 38 million places on the planet - there's two billion people using the card network in that way."

She pointed out that Apple has decided to use the card network as rails to make payments for that reason.

"We are already ubiqitous; we are already connected to 27,000 banks. It's been digital from the get-go and it's physical as well. And it works with all sorts of devices.

"So here's something that's already built that's a huge layer of very safe, very secure, very easy, instantaneous way of moving money around the world.

"It takes two blinks of an eye to move a transaction from one side of the globe to the other through our network. That's real speed and is really difficult for anyone to replicate.

She also pointed to the added benefit that comes from handling so much data: "When did the transaction occur? What was actually bought? So that you can do all sorts of reconciliation.

"If I buy something that I want to return, if I didn't have all of that data with the thing that I bought that would become that much more complicated."

She said the big data capabilities brought about by the network constitute an expanding field in economics.

"In fact our information is so good and so real time that it can indicate to governments in different countries - this is how your economy is going."

Security is one aspect of public blockchains that has proved to be 100% robust to date. Meanwhile, identity fraud is a big deal for card providers; mitigating it is a cost that ultimately gets passed on to users in the form of transaction fees.

Cairns said: "If you do a transaction over email it's not very secure. It's un-encrypted, it goes out into the ether sort of free and people can read it and so on, which is becoming quite a big issue now for many people.

To address this problem MasterCard has created a new technology which is called MDES - MasterCard digital enablement services. This system of tokenisation retains your 16 digit card credentials in a container and sends an encrypted version of them instead.

"Once that starts to be used ubiquitously that will be a very simple and easy thing to do. At this stage, it's just starting to happen; the banks are starting to adopt it, the merchants are starting to adopt it.

Cairns pointed out to IBTimes that there isn't a "considerable amount of fraud" on credit card transactions. "It's a very low percentage," she said. "But you want to get it to be absolutely minimal."

Other measures being rolled out include special safety nets across whole countries. These pattern recognition checks look for things recurring that can be picked up, then the system can stop transactions being processed.

"Our safety nets kind of bounce fraudulent transactions in an incredible way actually, in terms of really being able to connect up all the banks and consumers together and pick up anything that we think looks incorrect.

Another approach which has just been announced is selfie technology, part of MasterCard Identity Check suite of solutions.

"You can start authenticating yourself through your face. Obviously you use your thumbprints to use your Apple iPhone and authenticate payments.

"We are also working with wristband developer in Canada called Nymia and this wristband actually measures your ECG, your heart.

"It's like reading your iris or your thumbprint but in this case it continually authenticates you.

"With this persistent authentication you don't even have to do anything, you have got this wrist band on and when you make a payment you can just communicate with a terminal or something and say that's me."

She concluded: "We look at everything in our labs. One thing that I would say is we are not discounting any new technology."