The rapidly emerging digital ledger technology known
as blockchain is poised to revolutionize business travel, travel tech guru
Johnny Thorsen said at the recent Business Travel Show. Thorsen, founder of pioneering
mobile corporate travel service conTgo and now senior director of value
services for SAP Mobile Services, said blockchain could make credit cards and
expense reporting obsolete and will make self-regulating "smart
contracts" commonplace in travel procurement in 2018.
Blockchain is a highly auditable process that
documents transactions, locks them and makes them unchangeable. The technology
issues each transaction block to both the buyer and seller, including
information like buyer and seller identities, transaction details, the value of
the buyer's digital wallet from which payment is taken and the unused balance
returned to the buyer. The blockchain completes the transaction instantly using
any digital currency, such as bitcoin.
Thorsen believes blockchain will cause massive
disruption to travel billing processes. "The way billing happens in the
travel industry today is still very inefficient," he said. "If you go
into the new blockchain world, you eliminate the need for credit cards. Virtual
cards, fine. It's a good transition process, but why not go to instant digital
payment where you move money to a [hotel] supplier when the hotel room door
opens? When you leave on the last day, it knows what else you used and that is
paid for [and documented] instantly. It could actually eliminate the expense
report if you took [the concept] all the way out there."
Thorsen expects smart contracts, which create
parameters that trigger automatic payments by an agreed date, to transform
travel even sooner. "Smart contracts are self-thinking and
self-regulating," he said. "The smart contract monitors in the
background. If [a parameter is reached], the transaction will happen instantly
and digitally. Imagine if that were for hotel rooms. You know that after 500
nights, the next night will be 10 percent cheaper. The contract will regulate
itself. All it needs is transaction data telling it what to pay and when.
"Smart contracts are expected to dramatically
change the procurement and legal worlds. And they are unbreakable because they
rely on raw, native transaction data—nothing else. If you are a travel buyer,
this is a time for you to go and knock on your CFO's door and say, 'Why don't
we use my area to test these new capabilities?'"
According to Thorsen, the continuing, though diminishing,
volatility of bitcoin is holding back blockchain development, as bitcoin has a
reputation as "the scary currency for crime and gamers." He said the bitcoin
universe is worth $17 billion, and 20 of the 710 cryptocurrencies have a market
currency worth more than $10 million. Three carriers, including AirBaltic,
already accept payments in bitcoin.
Thorsen expects many more travel applications
for blockchain to emerge. Already in development is a "single global
loyalty switch" for loyalty programs. And, Thorsen said, "SITA is
trying to create a universal ID that that only lives for [the duration of] your
trip. You could not check into the airport unless you had a booking that gave
you an ID matching a record that you would be at the airport on that day. When
the trip ends, that ID is gone."