Alibaba to submit blockchain patent, expect to eliminate intermediaries in payment

ABR
August 7, 2018

According to the latest patent application, Alibaba has been utilized blockchain technology to facilitate international transactions.

As revealed with media on July 29, the patent application – “A System and Method That Adjusts Account Balance on a Blockchain” was submitted to the China State Intellectual Property Office in this January.

In the hope of solving the concept of adjusting account balances over a blockchain, Alibaba has innovate a blockchain-based system that could enhance cross-border transactions, especially the payments that relate to third-party payment vendors.

The document said that each third-party vendors and their banking partners will act as a node in a distributed ledger. Afterwards, each node will keep a record of user balances, reflecting accounts in a third-party’s mobile wallets.

When a transaction request is triggered, all the nodes in this system will validate user’s account balance, which is considered as a legal compliance check. Once the process starts, smart contracts would be triggered and encoded to the decentralized platform.

Based on how the system works, each node will update user’s balance to peer-to-peer database, which significantly avoid the reluctancy while transaction is executed.

Even though Alibaba did not mention whether they have any plan to apply the system on a commercial level in the future, a few day before the patent was published, the payment affiliate of Alibaba – Ant Financial announce the launch of their blockchain remittance service.

Ant Financial also shared that they are using blockchain to let Alipay users in Hong Kong to send money to residents in the Philippines through a third-party vendors and Standard Chartered acts as the settlement bank in both countries.

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