JCB and Keychain are developing a new digital payments infrastructure using blockchain technology. The two companies are hoping that the new solution will help meet the anticipated demand for digital payment services as 5G and IoT technology becomes more prevalent in the next few years.
In that regard, JCB and Keychain noted that the 5G ecosystem will create new challenges for payments solutions providers, since it will increase both the volume and the complexity of machine-to-machine transactions. For example, someone with an electric vehicle could automatically pay when they approach a charging station, or a farmer could receive payment for produce on a mobile device, even if that device is offline or they are in an area with poor coverage.
JCB and Keychain are hoping to solve that problem with a micropayment infrastructure that leverages blockchain and distributed ledger technologies. Their solution takes advantage of the fact that every single IoT device has a unique identity, which can in turn be linked to an owner to create a trusted digital identity.
From there, the solution delegates transaction approval, which is to say that the system pushes payment processing (and the associated risks) to the edge of the network. Doing so reduces latency since payment processing takes place in a spot that is closer to the geographical location of the original transaction, and makes it easier to mitigate risk at scale. Finally, the system will create a secure record of each transaction, and relay that information to the issuer to make sure it is legitimate.
The solution is built with Keychain’s flagship Keychain Core software solution. JCB and Keychain have filed a patent application for the new system in Japan, and are planning to build the infrastructure and conduct pilots in 2021 before launching the solution in 2022.