SETL, Deloitte and Metro Bank have successfully demonstrated a contactless blockchain smartcard retail payment system for 100 customers of the UK-based challenger bank.
The project is part of SETL's FCA Sandbox participation, which creates a ‘safe space’ in which businesses can test innovative products and delivery mechanisms in a live environment, while ensuring that consumers are appropriately protected.
For the tests, SETL provided a contactless smartcard enabled blockchain allowing digitised payments, Deloitte exercised its blockchain ID system known as Smart Identity and Metro Bank hosted a connected client account.
Customers taking part created their identity records on the Deloitte blockchain and their certified details were then posted to the SETL ledger to set up user credentials.
Over 100 users were issued with contactless smartcards and used them to make purchases from merchants, with all balances updated live-time from accounts held at Metro Bank.
The service, which is provided by SETL Payments Ltd, subject to appropriate regulatory approval, could launch as early as 2017, says SETL chief Peter Randall.
“This is not a proof-of-concept or a prototype," he says. "It will be a revenue generating implementation of distributed ledger technology.”
The partners believe a wide-scale implementation could significantly reduce current high costs for processing retail transactions and open the doors to competition in merchant servicing by challenger banks.
Craig Donaldson, CEO at Metro Bank says: "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.”