Financial services giant American Express (AmEx) has filed a patent for the blockchain-based proof-of-payment system through its travel subsidiary American Express Travel Related Services Company. This is to automate their current proof-of-payment system, by encrypting the payload data such as transaction amount and merchant's identity information, with a public key on a first blockchain node.
Payment for goods and services typically occurs at a point of sale or over the internet. In some instances, such as airline travel and concerts, for example, tickets may issue after confirmation of the payment. In the case of a home rental over the internet, the service provider may email a receipt or confirmation of payment to the housing provider. However, beyond a receipt or a ticket, there are limited options to prove payment.
The proposed system would encrypt the data. In simple words, when a customer will do the payment, the proof of that payment, transaction data, contract data, identification data, and/or other information, will be encrypted by the system and it can be fetched by the merchant with the smart device as and when needed. The patent describes:
"A payment processing entity (e.g., a credit card network, bank, debit, bitcoin, rewards points, or ACH [Automated Clearing House]) 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 information may be verified in presence of a customer as desired."
AmEx says that the proposed system could be used to 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. Similarly, a paying customer may gain access using a smartphone app that communicates using Bluetooth with the smart device by transmitting an identifier, which may be used to look up proof of payment on a blockchain.
The company has shown its support for blockchain technology even in the past. Recently, it deployed Hyperledger’s blockchain tech to upgrade its Membership Rewards program, becoming the first major U.S. financial services company to do so.