As daily-use devices, including household appliances and vehicles, become gateways for payments and transactions, there have been increased levels of concern about the security level of these systems. In particular, issues with network stability and distributed attacks have been major barriers towards the wholesale adoption of IoT payments by major financial institutions. However, Japanese credit card company JCB has developed an NFC-based payments system (in partnership with Keychain, a Singapore-based technology company specializing in blockchain and sovereign identity solutions) that promises to address these concerns. One of the key appeals of this announced product is the ability for both merchants and customers to engage in transactions while being offline:
“Leveraging Keychain’s blockchain and self-sovereign identity technology, the new infrastructure allows payments to be conditionally accepted by merchants, even in the event that both the payer and the merchant are disconnected from the network, a scenario known as double offline.”
In addition to the accommodation of ‘offline’ payments, this system also enables payments processing to be conducted over mixed networks simultaneously, while also ensuring that upon network restoration, ‘offline’ payments are securely transferred to an ‘online’ status. Offline payments are bound to increase the payment acceptance potential for SMEs across the globe, particularly in remote areas with limited network connectivity. As cash-based transactions continue to experience significant declines, JCB’s NFC product can occupy the space that cash leaves behind.
Overview by Shreyas Shaktikumar, Research Analyst at Mercator Advisory Group