MerchantMindtree has released its Merchant On-Boarding solution for acquirer banks and payment service providers. This uses Hyperledger fabric blockchain technology to enable participating financial institutions which facilitate credit card or debit payments more quickly, seamlessly and securely to onboard merchants as customers.

Financial institutions that process merchant transactions need to strike a balance between growing their customer base and preventing fraudulent transactions,” said Manas Chakraborty, global head of Banking, Financial Services and Insurance for Mindtree. “Both acquirer banks and merchants are frustrated with the on-boarding process and want more transparency, more speed, and less time and effort. Blockchain offers an exciting opportunity to eliminate complexity. Mindtree’s Merchant On-Boarding solution eliminates the need for third-party verification each time a merchant is onboarded and provides merchants with more insight into the process than ever before.”

Manas Chakraborty
Manas Chakraborty

Merchant On-Boarding

Acquirer banks and payment service providers need to onboard new merchants as customers as quickly as is practical. By doing so, they are able to increase the volume of transactions they process and thereby grow their business.

However, on-boarding questionable merchants – those who might authorise fraudulent transactions – produces charges and therefore losses which impact each bank’s bottom line. Therefore institutions need approaches which:

  • mitigate risk
  • assist them to comply with regulations (such as anti-money laundering, Know Your Customer and Know Your Customer’s Customer).

In practice, on-boarding merchants is a complex and risk-prone process. It involves significant due diligence checks and third party verification to ensure merchants aren’t involved in fraud. Mindtree architected its solution on blockchain technology to simplify and streamline this process. Automating the process:

  • reduces operational costs
  • improves quality control
  • applies standardised global best practices.

The Mindtree solution

Mindtree’s Merchant On-boarding solution exists in a Hyperledger fabric channel – which is a private distributed ledger framework for communication between members for all parties. It ensures secure and private sharing of document approval and information between all dependent stakeholders.

In effect, Blockchain technology offers capabilities to enable the authentication and authorisation of transactions and to achieve this securely and transparently. This ensures that data:

  • moves within a secure network
  • accelerates information sharing across all parties
  • ensures data is protected.

Enterprise Times: what does this mean

Bringing new initiatives which enables businesses to move faster have value. On-boarding new merchants enables a bank to expand its own businesses. As important, merchants want the processing of their authorisations to occur as soon as possible so that they may attract their own new business via credit and debit facilities.

What is so interesting about this approach is how information shared on a blockchain is usable for expanding businesses in a reliable and dependable ways. The more that such instances occur, the better for business expansion and acceleration – with one major caveat. The information, on example blockchains like that of Mindtree, must have accurate information. A key question is: will there will be adequate transparency?

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Charles Brett is a business/technology analyst consultant. His specialist areas include enterprise software, blockchain and enterprise mobility tech (including metering). Specific industry sectors of interest and experience include finance (especially systems supporting wholesale finance), telecommunications and energy. Charles has spoken at multiple industry conferences, has written for numerous publications (including the London Times and the Financial Times). He was the General Chair of the bi-annual High Performance Systems Workshop, 2005. In addition he is an author and novelist. His Technology books include: Making the Most of Mobility Vol I (eBook, 2012); Explaining iTunes, iPhones and iPads for Windows Users (eBook, 2011); 5 Axes of Business Application Integration (2004). His published novels, in the Corruption Series, include: The HolyPhone Confessional Crisis, Corruption’s Price: A Spanish Deceit and Virginity Despoiled. The fourth in The Corruption Series - Resurrection - has is now available. Charles has a B.A. and M.A in Modern History from the University of Oxford. He has lived or worked in Italy, Abu Dhabi, South Africa, California and New York, Spain, Israel, Estonia and Cyprus.

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