Directed payment – Blockchain and Payment: Synergies to be leveraged – Part 1
Directed payment is the ability to carry out transactions by controlling the object for the expenditure, or the specific category of products or services being bought.
The control can be based on several criteria: merchant taxonomy, amount, date of the transaction, type of product …
The traditional payment system still has some gaps in this area, as it is currently quite complicated to direct payments to specific uses or under certain conditions.
As an illustration, here is the example in some medical practices.
Currently, the insured person, when visiting an osteopath (this is an example to be generalized to alternative medicine), must fund in advance, and then send an invoice to the insurance company, which verifies the clauses of the contract to proceed to the reimbursement.
Here are some of the challenges for the users:
- The customer must pay the costs in advance and then be reimbursed with a delay: the customer journey is not seamless
- The insurer must manage a payroll to handle these transactions
According to a November 2021 IFOP study (carried out) MoneyTrack):
- 41% of French people who have difficulty keeping up with their health reimbursements have already given up receiving care
- 30% of French people have downloaded the mobile application of their health supplement and only 5% use it often.
- For 6 out of 10 policyholders, using their health app would make sense if a payment method was attached
This case highlights the main limit of the current model: payment methods are not manageable in real time and involve many intermediaries.
However, in the last few years, a technology has appeared that could offer some answers to all these problems: the blockchain.
In fact, blockchain is a technology that allows information to be stored and sent seamlessly, securely and without a central regulation body.
It is programmable via ‘smart contracts’ allowing to automate transactions that meet certain criteria.
It could therefore take a piece of the managed money segment, estimated in the range of 3 / 5% of world GDP in 2022
