Blockchain is the buzzword in payment innovation, especially since the technology should require relatively little investment.
But the case for blockchain supporting consumer or retail payment is still to be made, and a lot of work remains to be done.
In fact, many payment innovations will be evolutionary rather than revolutionary. Many new payment methods are simply different ways to conduct a legacy transaction.
Mobile wallets, for example, are simply an alternative method of conducting traditional card payment transactions in a more secure and consumer-friendly fashion. In essence, the PIN code is replaced with biometric authentication. Though this represents a significant and visible change for the cardholder, it is still a regular card transaction that the merchant will remit like any other.
Many countries now have [real-time bank transfer] and I believe it represents the first credible alternative to the ubiquitous card payment
Meanwhile, the bank transfer is being rejuvenated by moving it into real-time confirmation. “Many countries now have such an instrument and I believe it represents the first credible alternative to the ubiquitous card payment, because it offers the merchant a guarantee of payment at time of sale but with the extra benefit of real-time financial settlement,” says Christophe Kato, IATA's Head, Payment Services.
This new payment method means the deployment of new infrastructure, made complex by the fact that most implementations will be of a domestic nature. Today, card payments work more or less the same everywhere in the world. The danger, says Kato, is that real-time bank transfers will be a fragmented offer although there are initiatives to curtail this as much as possible, such as the regulatory push in the European Union to standardize instant bank transfer across the EU.
IATA is involved in two pilots involving direct bank transfer as a form of payment for direct sales between an airline and customer, typically via the airline website. One is being done with Deutsche Bank and the other is with ipagoo.