Banking News

Japan’s JCB starts testing blockchain machine micropayments

jcb card

Japanese card provider JCB announced a new micropayments solution developed in conjunction with enterprise blockchain startup Keychain. The solution targets machine to machine (M2M) payments for 5G and IoT projects. The project is still at the technical verification stage, with plans to test it this year and go into production in 2022.

One of the most common M2M applications is road tolls, where a car wallet can communicate automatically and make the payment without human intervention. 

Outside of the MOBI alliance and cryptocurrencies, many ideas for using blockchain and smart contracts to automate M2M payments are theoretical. Hence the project aims to clarify some of the challenges through testing.

With conventional manual payments, a person would pay for a toll or for charging the car. So the first step with M2M payments is associating a responsible person with the device, although it would need the person to initially confirm the association.

M2M payments require very fast response times and must have low costs. They need the ability to work offline, and there are likely to be a large volume of them. Hence JCB and Keychain believe that a purely centralized payment solution might not work, and instead it needs to be layered. So they suggest a layered system that sits between the cloud and the physical devices to enable transaction approval.

One of the uses of blockchain is to construct a secure log of payments history. That way, even if a device is lost, the history is recoverable.

JCB and Keychain first started to work together at the end of 2019, initially for Keychain’s identity solutions. But JCB has numerous other blockchain initiatives. It’s working with LayerX on a B2B payments solution that nets transactions. JCB has a partnership U.S. payments firm PayStand for corporate SME payments. And another relationship with accelerator TECHFUND for a blockchain payments system.


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