Blockchain technology has the potential to transform the payments industry

By Nicole Miskelly | 23 March 2015

At the Future of Payments Forum at Payments International 2015 last week, a number of speakers addressed the benefits of the underlying blockchain technology used by Bitcoin and its ability to change the payments industry.

Neil Telford-Reed, Director of Technology Innovation at WorldPay said that he thinks cryptocurrencies are interesting but it is “blockchain as a technology that could change the world.” Speaking during a fireside chat with Bradley Howard, Head of Endava Labs and Head of Digital Media, Endava, Telford-Reed said he believes that the potential for blockchain to disrupt both payments and insurance industries could be extraordinary.

25 per cent of the audience at the payments forum on Friday said they own a Bitcoin and the other keynotes discussing how far technology has advanced prove that people are now more willing to try new things.  Mark Stevenson, author of ‘An Optimist’s Tour of the Future’ said there has been a billion fold increase in processing power since 1965 and with the testing of driverless cars, “we’ve gone from something impossible to something possible.”

Lasse Birk Olesen, Product Manager, Coinify said that bitcoin blockchain is a technology, and like any technology it intends to be around for a long time. According to Olesen, blockchain presents an opportunity to offer new services and products to bank customers.

When it comes to the state of the payments industry at the moment during his keynote, Telford-Reed said that when his mother was a child shop assistants knew who she was and would hand over the goods to be paid at a later date but this scenario of trust and recognition has since changed and “we are now having to use technology to put trust and identification back into payments,” he said.

According to James Governor, Co-founder, Redmonk, “software is eating the world,” and we are moving from systems of record to systems of engagement, with players such as ApplePay adopting an “embrace, extend and extinguish approach to business” and Amazon Payments, who he thinks has an even more aggressive approach than Apple. Governor believes that the banking industry should be terrified of challengers such as Facebook who have recently announced that users can send money to their friends using their Facebook Messenger app.

Luke Olbrich, Head of EMEA Core Payments, PayPal said that as more new payment providers enter the market, the more regulated they will become. “More and more payment providers will become regulated and if Bitcoin technology gets big enough it will become regulated also.”

Stevenson mentioned IBM’s proof of concept for ADEPT, and news last week that IBM is considering adopting the blockchain technology behind Bitcoin to create a digital cash and payment system for government and central banks. Stevenson said that blockchain’s technology is based on a network of trust, something which is lacking with third parties and he believes “trusted third parties will be replaced by networks of trust.”

Since IBM joined the race to adopt blockchain, Intel is reportedly also planning to investigate the potential of blockchain technology and the rest of the industry is waiting to see who will transform the payments landscape with blockchain technology first.

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