Metro Bank, Deloitte and blockchain startup Setl have created a card for making simple contactless payments such as buying a morning coffee, using the distributed ledger technology (DLT) in a trial that's understood to be the first of its kind. The card has been tested by 100 people as part of the City watchdog's fintech sandbox and works in the same way as a contactless credit or debit card for users. However, the technology bypasses clearing through a bank and the transaction appears instantly in both the customer's and merchant's bank accounts. Read more: The Bank of England has lifted the lid on its fintech accelerator The firms believes it can also reduce the costs of fees associated with accepting the cards for retailers while being more secure than traditional cards. "Given all the potential that blockchain has to offer, we hope that the success of the test will play a key role in moving us a step closer to providing a more efficient and flexible service for customer," said Metro Bank chief executive Craig Donaldson. The card works by users verifying who they are with Deloitte's Smart Identity, a blockchain-based prototype for creating a digital identity. This works with Setl's own blockchain, which uses a digital currency that is backed by Metro Bank deposits. Setl believe the card has the potential to disrupt retail banking by making it easier for challenger banks to launch a card as they would not have to partner with clearing banks "We think that the opportunities for the marketplace are very ripe – the Competition and Markets Authority and Payment System Regulator are all saying they want to see more choice," Setl founder and chief executive Peter Randall told City A.M.. Read more: This consulting firm has created an "editable" blockchain and people are puzzled He said the trial had proven scale, capacity and regulation – including KYC and AML – were not an issue. Now, there are ambitious plans for further testing and a goal of early next year to launch a full product. The project came about through the Financial Conduct Authority's regulatory sandbox which is designed to let firms create and test new technology with a close eye from regulators. It last week revealed Setl was one of 18 firms which were successful in joining. "The sandbox has given us a phenomenal opportunity to engage with regulators. If we’d done it before [the sandbox] it would have taken months and cost a lot of money. It has given us a real leg up in terms of approval," said Randall.
Setl , Deloitte and Setl , a blockchain start-up, have developed a contactless payment card using distributed ledger technology. Having already been tested by one people as part of Metro Bank fintech sandbox, the card uses Metro Bank ’s Smart Identity to identify users and then payments are processed over the Financial Conduct Authority's 's blockchain.