Why blockchain is taking off beyond payments in the mass market

Author David GW Birch is the director of Consult Hyperion, a secure electronic transaction consultant. He was recognized by Wired magazine as an internationally recognized thought leader in the field of digital authentication and digital currency, and he is one of the top 15 most popular business news writers in the world.
Looking at the outlook for payments, I think 2016 will be the year of differentiation for blockchain technology.
Let’s look at why by breaking down the payments space into four areas and looking at how each relates to blockchain technology. The four main areas are technology, business, social, and regulation.
Technology Trends
There is no need to spend a lot of time talking about technology here, because an important avenue has been opened: mobile Internet. Financial services and blockchain APIs have been developing this year. (Not considering the special development of Bitcoin ).
I don’t want to go out on a limb and say that these technologies, along with big data and cybersecurity, will attract more investment from mainstream financial institutions (yes, blockchain will attract more investment from mainstream financial institutions).
In a transaction-oriented corner of the world, we would rather move into the ECB's strong customer authentication drive, and are clearly starting to move closer to biometrics.
Apple’s breakthrough in reimagining biometrics for the mass market, prioritizing convenience over security, has been a huge success and continues to be, and I look forward to seeing mass-market user biometrics take the leap to payments.
Business blockchain
When it comes to business, we can see the outlines of major trends.
If you look at the revenue statistics of European banks, you will see pressure on all business segments. As a result, there is an additional cost that grows with some new business models and revenue sources, which is more likely to be part of the cost of blockchain participation.
I have a theory about part of this possibility, which we'll come back to later.
Payments is not all about banks. I think it's interesting to think of it as non-bank banks and quasi-banks, especially quasi-banks.
Quasi-banks are banks that look like banks to users but are not real banks, and they are a unique business opportunity in the market. You can go to Holvi and Moven to see that people like to go there.
And you also have non-bank banks like Facebook, Google, Amazon, etc.
I think one group that has not been reviewed is retailers. Retailers really haven't really entered this space yet (except obviously Starbucks), and because retailers are in a prime position to engage with customers, it would probably prove more meaningful if they chose to do so in this space.

  My view is that this continued shift in applications toward retail solutions is indicative of a fundamental change. I once said that if blockchain is going to revolutionize things, it will make the guy running the dishwasher more insured than the Federal Reserve, and I stand by that view.
Social class
In the social space we would broadly say there are three groups that would be viewed and considered as the new type of payment system.
Firstly, we have an ageing population. I recently looked at a project that involved facial recognition. You download a banking app on your phone and you log in just by looking at it, so you are verified to be who you are and it is very popular, not through the tricks that millennials are obsessed with (they love to use their fingerprints), but some older people will never remember a password or PIN (like me). This new technology is not just for kids!
Second, you'll get support from the squeezed middle class. Many people like me have to wake up at 7:52 in the morning and barely avoid Waterloo every time because they have to fumble to get things done due to time constraints. I need a service that can publish the right articles immediately, and you will see the word "article" appearing frequently in proposals in the next year.
Finally, you have the mobile generation. For them, the payment system we manipulate is going to drive them into the gutter and make them disappear. In a Venmo world, Facebook Messenger payments are going to be as important as ChasePay and Sumsung payments and some other payments.
Voices of Change
To sum up, this is a trend of change.

  In the payments space, this is by far the most important trend. It has nothing to do with whether people think the guy who came up with the blockchain is a big liar. It has nothing to do with whether people figure out a way to sell things to young people. It has nothing to do with whether they come up with a giant quasi-banking structure and make it work, because this is actually a world of change, and the trend of change can wrap them up and work within it.

Here I would like to point out two key transformation trends in the blockchain field that are worth noting.
The first is that people are already using "instant payments". In the UK, faster payments are already well established and have been incredibly successful, with leading companies like Pingit and Paym. More will follow.
The same thing is happening in other countries. In the past, our biggest expectations have always come from the United States, because the Federal Reserve does not restrict banks from making some changes in the payment system, so we have been considering this before instant payment appears in the United States.
However, the fact is that in recent months a lot of information has appeared in the United States: THC and VocalLink are working together, Dwolla is experimenting with APIs, NACHA also took action on the same day, etc.
Even in the US, instant payments are going to be very important in the coming year. Once you can send money from one person to another, Bitcoin will have to work hard to find a suitable payment method for these typical users.
The second is the Second European Payment Services Directive, or PSD2. This directive requires banks to provide open APIs to third parties in 2018. The EBA provides three categories for these API services:

     A mandatory payments API, which all banks will have to implement, to manage third-party access to account information and transaction information;

     Payment API is not mandatory, banks are allowed to offer some distinctive services they can provide, trade finance or FX.

Non-mandatory, non-payment API.

I would say that if European blockchain entrepreneurs want to find an opportunity in this field to make it interesting, different and very special, what you need to see is that there are no payment services but these services are all around them, and what they need to do is to provide value-added services together with payment services.
So my advice is that our clients look at non-mandatory, non-payment APIs. Blockchain can provide new services to these APIs, and provide banks with existing and expanded services. In my opinion, the most important one is around identity management and verification services, and I expect we will do a lot of work in this area next year.