SETL (London-based fintech company)and Deloitte DLTE (global auditing firm) have teamed up to develop a contactless card that enables retail fees to be processed and resolved almost instantly by the means of blockchain technology. Tested by 100 users, the payment card was a success and it is anticipated to go into commercial production by the end of 2017. Generated for clients of FTSE 250-listed Metro Bank, the test-users used their cards to pay for cupcakes in sterling by both consumers and merchants bank balances updated in live-time. SETL CEO Peter Randall said, “this is fiat currency, it’s real money. It’s not a form of cryptocurrency or anything else; it’s money you can go and take out of the bank and spend”.
This generates a golden record of any given set of data that is systematically cloned for all parties in a secure network, wiping out any need for third-party verification, and allowing for fees to be resolved as quick as possible. Experts say blockchain technology has not yet determine its scalability; bitcoin’s blockchain at the moment processes fewer than 300,000 transactions per day, but SETL says it can process billions of transactions per day, or tens of thousands per second, allowing it to compete with the large card networks, which process around 2,000 to 3,000 transactions per second. Smart Identity of Deloitte is the payment card that uses a blockchain system with customer identity data stored and licensed by Deloitte and then sent to SETL to set up user attestations. The payment card would allow merchants to offer payment services to their customers for a much lower cost than the card providers that currently dominate the market.
SETL is part of the Financial Conduct Authority’s regulatory sandbox – an arena for start-ups to experiment with new technologies without provoking all the normal regulatory consequences of engaging in the activity in question and has been circulated with an e-money license by the FCA.