Blockchain technology has payments promise for travel companies
Blockchain, the computer network underpinning Bitcoin, is touted as a way to save airlines, hotel groups, agencies, and other travel companies billions by streamlining bank payments and settlements and offering “a single, secure, transparent global ledger,” according to a few reports today.
The technology is described today by the Financial Times as a way of “updating payment ledgers in multiple locations without a single, centralised authority.”
Its promise has led nine of the world’s largest investment banks, such as Goldman Sachs and Credit Suisse, to announce today their plans to start working together to see how to adopt it for their transactions.
Mention the word Bitcoin, and people assume you mean the virtual currency. But Blockchain is about something else — the underlying technology behind it.
Blockchain could significantly enhance accounting for travel companies, which have complicated ledgers to track and payments to settle in multiple countries and currencies. In the words of a Frost & Sullivan report released today and sponsored by travel giant Amadeus IT Group:
“It is essentially a single, extremely secure, transparent global ledger.The network, rather than a third party, validates a transaction.This means that friction (and cost) can be reduced across the network.”
Here’s The Economist’s take:
“In essence, the blockchain is a giant ledger that keeps track of who owns how much bitcoin. The coins themselves are not physical objects, nor even digital files, but entries in the blockchain ledger: owning bitcoin is merely having a claim on a piece of information sitting on the blockchain.”
The full Economist article — “The next big thing ” — explains blockchain’s potential.
There’s a lack of standards and protocols aspects of Blockchain, which has hindered its adoption.
Note: Blockchain image courtesy Wikimedia.
Sean O’Neill had roles as a reporter and editor-in-chief at Tnooz between July 2012 and January 2017.