Payment

Blockchain Testing Gives Positive Results for Consumer Payments

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Over the past week SETL, Deloitte and Metro Bank have completed a series of tests around consumer payment opportunities. SETL has provided a contactless smartcard-enabled blockchain to process digitised payments, Deloitte has exercised its blockchain ID system ‘Smart Identity’ and Metro Bank hosted a connected client account. The system aims to provide instant settlement for and significant reduction in charges compared to credit and debit card schemes, on a highly secure platform.

In an initial test, over 100 users were issued with contactless smartcards and used them to make purchases from merchants equipped with contactless terminals. Consumers and merchant balances were updated in real time with all balances held at Metro Bank.

The successful implementation of a blockchain smartcard retail payment system offers the possibility of significantly reducing high costs for processing retail transactions. It also opens up the market to a wider range of players, beyond the current clearing banks. The service which is provided by SETL Payments Ltd may launch in 2017, subject to appropriate regulatory approval.

By on-boarding participants, Deloitte demonstrated its Smart Identity blockchain solution communicating with SETL’s payment blockchain. Customers taking part created identity records on the Deloitte blockchain and had key details certified by Deloitte. These certified details were then asserted to the SETL Blockchain to set up user credentials, demonstrating how portable, cryptographically secured identity could be applied in a real-world consumer environment.

The technology also seems to be able to cope with a high volume of trading with SETL reporting a capacity to process billions of transactions a day, including burst speeds of tens of thousands per second. Compared to this, large card networks may see an average of 2000 to 3000 transactions per second, with burst rates of around 14,000 transactions per second.

David Myers, Partner at Deloitte, said: “To use the Deloitte Identity solution in this way is particularly relevant as it underlines the importance, in the new DL world of identity management. We are pleased that SETL together with Metro Bank have been able to demonstrate both speed, capacity and identity in the challenging retail payments arena

CEO of Metro Bank, Craig Donaldson commented: “We’re always looking for new ways to improve our customers’ banking experience, and payments is an often overlooked but critical part of a customer’s journey. Retail payments have for too long been dominated by a few players to the detriment of customers. Given all the potential that blockchain has to offer, we hope that the success of today’s test will play a key role in moving us a step closer to providing a more efficient and flexible service for customers.”

Peter Randall, CEO of SETL, noted: “We are extremely pleased to be working with Deloitte and Metro Bank on this ground-breaking project. The team are leaders in the field of transaction implementation and retail banking service and our common focus on high speed, capacity and resiliency makes us natural partners. This is not a proof-of-concept or a prototype; it will be a revenue generating implementation of distributed ledger technology.”

Matthew Warner
Based near Windsor, England, Matthew Warner is an enthusiast for innovative, cutting edge technologies. He is a B.Eng. graduate in engineering with honors from the University of Warwick and also holds an PGCE in education degree. Matthew is a member of Mensa.