Patent shows that Alibaba wants to eliminate intermediaries in payments

Chinese giant Alibaba is exploring the use of Blockchain technology to accelerate international payments, according to a new patent application, called "A system and method that adjusts the balance of the account in a Blockchain".

The application, titled "A system and method that adjusts the balance of the account in a Blockchain", was filed with the China Intellectual Property process manager in January of this year and was unveiled last week.

In order to address the broad concept of adjusting account balances in a Blockchain, the company explained how the system could be used to facilitate international transactions that specifically involve a third-party payment provider.

For example, the document says that third-party payment services and their banking partners in different regions would function as nodes to form the Blockchain provided. Subsequently, each node will maintain a user balances ledger, reflecting the accounts in the mobile portfolios of third-party payment providers.

When a transaction request is initiated, the nodes check the balance of the user's account, taking into account any legal compliance procedures that must be followed - a process imposed by the activation of smart contracts coded in Blockchain, the patent says.

Nodes would update the balance of users by sending and receiving the transaction value in a decentralized way, thereby eliminating the need for an intermediary and avoiding the resulting delays in transaction time, according to the document.

Although Alibaba did not explain how or if it intends to apply the system commercially, the document was published only a few days after the company's payment affiliate, Ant Financial, announced the launch of a Blockchain-based shipping service.