Blockchain Bypassing ‘Very Expensive Legacy Infrastructure’
Following a successful trial with 100 Metrobank customers, the joint program will roll out to allow instant transactions which bypass “legacy infrastructure.”
“What this allows people to do is to effectively make a payment from their account to the merchant’s account, completely encrypted end-to-end, without having to go through all the existing very expensive legacy infrastructure,” SETL CEO Peter Randall told Reuters today.
The trial involved card payments for — of all things — cupcakes in GBP, highlighting the system’s remit for processing “tens of thousands” of transactions per second, mimicking and even surpassing card providers.
New Product, Familiar Language
While Deloitte’s Smart Identity Blockchain tech provides the backbone for instantaneous settlements, the scheme’s participants are already making it clear that it is the fiat currency system which stands to benefit.
“This is fiat currency, it’s real money,” Randall continued. “It’s not a form of cryptocurrency or anything else; it’s money you can go and take out of the bank and spend.”
Present again was talk of “distributed ledger,” traditional banks’ long-favored yet oft-criticized term for blockchain implementations in which crypto-anything is notably absent.
“(This) underlines the importance, in the new distributed ledger world, of identity management,” Deloitte’s David Myers commented.
The UK regulator, the Financial Conduct Authority, sanctioned the scheme by giving SETL free rein to develop the trial free from compliance with standard regulations. The organization offers similar ‘breathing space’ for experimentation by a number of fintech startups.
Credit Cards on Metrobank’s Radar
On Metrobank’s end, the aim appears to be principally to compete with Visa and MasterCard, disrupting their market monopoly on payments and associated fees.
“Retail payments have for too long been dominated by a few players to the detriment of customers,” CEO Craig Donaldson said.
“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.”
Deloitte for its part, however, has been championing both blockchain and Bitcoin in a major way for several years. The accounting giant last month announced its Catalyst scheme, which it aims at demonstrating the technologies’ real-world use potential through more than 50 study cases.
At the time, CEO Cathy Engelbert described that scheme’s mission as “enabling Deloitte and our clients to more easily tap the power of innovation.”
What do you think about the Metrobank scheme? Let us know in the comments section below.
Images via Shutterstock
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