Viewpoint: How Bitcoin Technology Could Make Travel Better
Airline travel in an era of heightened global security can be cumbersome, trying and time-consuming. Security, of course, is the prime reason for the many layers of information and data now involved in verifying (and re-verifying) passengers’ identities. Across the globe, airlines, travel companies and governmental agencies are focused on making travel as secure as possible in uncertain times.
Typically, airlines, government agencies and travel firms maintain and demand their own unique forms of passenger identification, payment configuration and transactional data. These multiple and disparate pieces of data—passports, visas, other travel documents, boarding passes, driver’s licenses, credit card numbers, government-issued IDs, etc.—mean that the process of purchasing a ticket, arriving at an airport or train station, passing through security lines and arriving at the gate refreshed and ready to travel is not as simple as it was just a few decades ago.
As they look to the future, forward-thinking airlines, travel companies and airline organizations are considering the potential and application of blockchain technologies for the travel industry—especially around passenger IDs and payments.
A Universally Accepted Passenger ID
Aided by the collective agreement and speed of blockchain processes to authenticate and verify digital transactions, airlines and travel experts are hoping to leverage blockchain’s potential to create passenger IDs that can be accepted quickly and seamlessly for all parties involved —passengers, airlines, travel firms, airports and governmental agencies.
For background, blockchain processes were created to function as an online, digital ledger (public or private) for verifying and authenticating bitcoin and other cryptocurrency payments and transactions. The blockchain was created because bitcoin transactions originate and occur outside of the traditional banking network. Blockchain ensures that virtual payments and transactions are authentic, verified and completed securely. By sharing transactional information across a network of computers, trusted peer-to-peer blockchain “miners” quickly and collectively authenticate and verify all of these virtual transactions.
As it moves beyond the currency business, the blockchain process is being considered for other non-payment activities, including legal contracting, supply-chain management, investing and trading, file storage and travel. Several organizations, such as the International Air Transport Association and the U.S. Department of Homeland Security, are exploring creation of a single, secure and unified passenger ID.
The goal is a data-integrated, universally accepted ID that’s created by layering existing information with new forms of identification and verification—such as fingerprints or iris scans—to prove conclusively that passengers are who they say they are and to move them through various travel checkpoints quickly, seamlessly and securely.
A blockchain-supported identity would look something like this:
- A digital ID record created by combining one database or online ledger with all of the existing but disparate data and records: government-issued travel documents (such as passports, visas, employee IDs, licenses, etc.) combined with other pieces of data, including company data, airline and travel records, loyalty program memberships, stored payment data, biometrics and mobile device numbers.
- Blockchain “miners” would independently and collectively verify that each data set is singularly linked to each passenger (please see sidebar.
- The “master” ID that emerges from this complicated but necessary process would meet the requirements of all participating companies and agencies, and would be accepted by all participants as well at various phases of travel.
The same ID used to purchase a ticket and check in would be the same ID used to pass through customs or security, obtain a boarding pass, even make an in-flight payment from a digital wallet.
|What is Bitcoin Mining?
Blockchain transactions involve complex mathematical and computational processing in order to validate and authenticate them.
Blockchain “miners” handle the heavy lifting on the back end. The original miners involved in bitcoin cryptocurrency transactions tended to be computer-savvy, work-at-home individuals who knew and understood the complicated process of blockchain authentication and verification, and had the necessary computer equipment to handle it. For each block they added to the bitcoin chain, they earned a pre-specific number of bitcoins, and that process remains in place.
As blockchain transactions have moved beyond bitcoin, mining is also being handled by computational firms that specialize in it. They provide the necessary high-powered computational equipment, massive amounts of electricity required to run the computers, and software involved in blockchain mining. These firms bid on transactions and receive payments when the transactions are verified, authenticated and published.
Because the blockchain process lives in cyberspace, all of the work is done, verified and published online with full transparency. Each new “block” added to the chain is permanent and cannot be altered.
That type of ID, ideally, would enable travel around the world with fewer interruptions or repeated requests for the same information, and less bureaucracy by travel companies and government agencies.
Blockchain also has potential in other travel sectors, including:
- Loyalty programs: Blockchain technology could help streamline and verify the earn-and-redeem processes involved with the points and miles in airline and travel loyalty programs. Blockchain could make it easier for passengers to authenticate and use their hard-earned miles and points, while protecting airlines and loyalty programs from fraudulent manipulation, hacking, cybersecurity threats, theft and other forms of loyalty program fraud.
- Payments: Blockchain capabilities also can be integrated into airline and travel e-commerce orchestration platforms—the same platforms that make it easy for airlines to add, remove and update payment service providers, digital wallet solutions and payment acquirers. Any process that simplifies the complexity of the always-changing mobile payments ecosystem can shorten time to market for products, speed deployment and reduce the workload on I.T. and technical staffs.
- Payments Fraud: The blockchain process, which is built on collective verification, transparency and speed, removes many of the incentives and opportunities for hacking. In and of itself, blockchain could help reduce much of the payments fraud, hacking and identity theft that currently occurs with vulnerable commercial transactions.
Even though it was created for virtual currencies, the blockchain process holds great potential for non-payment activities and transactions. A universally accepted, fully verified passenger ID for global travel just might be one of the many innovative offshoots to emerge from blockchain technology. And 2017 just might be the year that legitimate efforts to create, test and launch it finally get it off the ground.
Kristian Gjerding is CEO of CellPoint Mobile, which develops payment solutions and technologies that help airlines and travel companies around the world deploy payment and e-commerce solutions in a marketplace shifting rapidly to the mobile environment. He also co-leads CellPoint Mobile’s recently created Travel Innovation Hub. www.cellpointmobile.com
In Viewpoints, payments professionals share their perspectives on the industry. Paybefore presents many points of view to offer readers new insights and information. The opinions expressed in Viewpoints are not necessarily those of Paybefore.