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How can blockchain technology improve the travel and tourism industry?

According to robust data, the travel and tourism industry is the second-fastest-growing sector in the world, after manufacturing. The World Travel and Tourism Council (WTTC) concluded that in 2018, travel and tourism increased by 3.9%, more than the global GDP growth of 3.2%. As we speak, the Coronavirus outbreak generates a degree of uncertainty related to how and when the travel and tourism sector will get back to normal. However, we consider that destinations around the world begin to accept this delicate situation with a number of precautionary measures in place. Besides recommended measures coming from local authorities, such as social distancing and proper hygiene, we believe that travel and tourism organizations have the proper resources to integrate innovative technologies, such as blockchain and cryptocurrencies.

If used accordingly, blockchain and cryptocurrencies can contribute to the comfort and safety of a traveler’s journey. It can provide a new experience in terms of booking travel tickets and hotel rooms, removing intermediaries out of the way. For the purpose of this article, we’re going to explore different applications of blockchain technology in the travel and tourism industry.

First, what is blockchain technology exactly?

Even if it might sound confusing at first, it is actually pretty straight-forward to understand the basics of it. It can be looked at as a list of public records, also known as public ledger, with transactions between parties listed or stored in a transparent manner. Individual entries are encrypted and grouped into blocks that form a chain, therefore leading to the blockchain terminology.

The main characteristic and differentiator of the blockchain technology is that data is decentralized, meaning that it becomes available throughout the different nodes or computers part of the network. Copies of the compiled information are available on individual devices that are part of the network. In other words, the information stored is shared across a peer-to-peer (P2P) network. It is completely transparent, and it cannot be altered without the permission of the entire network and without modifying all subsequent blocks.

Applications of blockchain in Travel and Tourism

Recently, blockchain has gained a lot of interest in the travel and tourism industry. An increasing number of major companies have incorporated this technology in their list of offerings. Below, there are different ways in which blockchain technology might be used in the travel and tourism sector.

  • Lower transaction costs

The implication of intermediaries has inevitably been one key issue in the travel and tourism sector. These third parties involved in the booking process of hotels, airlines and other travel service suppliers result in additional fees for the end-user (tourist or traveler). TripAdvisor is an example of a third party that charges additional fees for their available services.

With the employment of blockchain technology, the long chain of intermediaries that results in delays and financial losses can be simplified. It is an ideal way to close the “gaps” made by different payment providers. At the moment, travel agents wait on average 60 days to earn their commission after a client checks out, because of the many parties involved in the payment cycle. Commission reconciliation can be a real hustle among travel agents. Travelport, a B2C travel service provider decided to adopt IBM’s Hyperledger Fabric to assure commissions paid to travel agencies. The main purpose of this partnership is to decrease the number of third parties involved in the payment cycle, by relying on blockchain in the process of a booking.

  • Trucking luggage

I bet that some of you that are reading this post have experienced issues with claiming a luggage, especially when dealing with international destinations. It’s definitely not a good start for a holiday or business trip. A traveler’s baggage is subject to several automated and manual processes, before being picked up at the final destination. This luggage itinerary is stored in a non-standardized form by the parties involved and these parties include airlines personnel, transportation companies, airports, and local authorities.

Blockchain, with its online-record keeping system stored on a peer-to-peer network can be a game changer and step up the way in which airlines tackle the problems of lost luggage. This way, both customers and airlines can track a luggage in all stages of its transfer process, offering full transparency to the process. Therefore, if a bag is mistakenly left behind, airlines can easily access its entire journey and identify the exact point where it went missing and the reason for that.

Back in 2017, Air New Zealand partnered up with Winding Tree, a decentralized Swiss travel start-up. The main purpose of this collaboration was to explore applications of blockchain technology in the airline’s business. Their mission was to improve  security and efficiency of services, such as baggage tracking and ticket booking.

  • Traveller’s identification

As blockchain does not store information on a central database, the customer identification process can save up a considerable amount of time by using this technology. It can even replace passports and become an industry standard for storing such personal information.

The World Economic Forum along the governments of Canada and the Netherlands launched a pilot program for paperless journeys between the two countries. This new project, entitled Known Traveller Digital Identity (KTDI), is the only solution to use digital identity for international trips, giving the traveler’s full control over how their own data is used. Personal data that is usually stored on a passport’s chip is replaced by encrypted data stored in a traveler’s digital wallet and it becomes available on mobile devices. Compared to old-fashioned ID systems that are operated by centralized authorities, KTDI is based on blockchain technology.

  • Secure and traceable transactions with Cryptocurrencies

An increasing number of companies in the travel and tourism sector begin to realize that accepting cryptocurrencies as a payment alternative creates a seamless purchase behavior. The major benefit that cryptocurrencies brings with it is that it eliminates traditional payment methods that rely on third-party payment apps. This way, transactions can occur between two entities directly involved. Payments based on blockchain technology will also decrease the time needed for completion of payments, resulting in faster transaction speed and more sales.

Another benefit is that cryptocurrencies replace the need of exchanging money into the local currency. It eliminates currency exchange commissions and users can take advantage of the same value no matter where they are. Forget about spending part of your allocated budget on bank commissions.

Given the various benefits of accepting crypto payments in travel and tourism, there are still some gaps that need to be addressed. It is not enough for a single entity to accept cryptocurrencies. For example, a travel agency that accepts crypto payments will still have to exchange those to Fiat money to contract services from providers that do not accept digital currencies. It is a matter of time until other parties involved will realize the benefits it brings with it.

Final thoughts

There is no doubt that blockchain technology has enough features and resources to revolutionize the travel and tourism industry. However, this innovative technology is still in the early stages of its life. To take advantage of its unique features, such as personal identification, governments and other authorities should have a good understanding of the benefits that it brings to the table. Anyway, many organizations from the travel and tourism industry begin to find out its applicability and that’s obviously a good sign for those involved in it.

Oveit Pay v2 — the version with a mission

The first version of what we now call Oveit Pay was launched in 2018. It was a system that allowed event planners to create a small event economy and monetize transactions done in their event space. Simply put they invited third-party vendors to their events. The vendors would sell goods (mostly food and beverage) and the event planner would get a cut of what was sold. This helped increase the event’s revenue.

The increase in revenue was and still is very important for many, many event planners, especially festival owners. Without this economic concept the festivals we enjoy were either not possible or very hard to pull off. After the Coronavirus outbreak and the reshuffling of the live entertainment business, closed loop payments model will probably become the norm for a lot of the festivals that will survive.

How Oveit Pay came to be

We were very rudimentary at first. The idea was to use an RFID tag to store monetary value for digital wallets, inside an event. People would wear wristbands which can be either topped up or used to spend existent value. In the beginning we tested everything on laptops and RFID readers. We purchased a bunch of RFID readers and would connect them to the laptops. We found out that different readers were reading different values on the wristbands, due to how they were designed. This was issue no. 1.

Another issue we found was that this concept was very unstable if we were to ship it outside of our area of support. We’ve had a client asking for the technology to be used in the city of Medellin, in Columbia. As Narcos was airing on Netflix we were jokingly discussing the implications and a need for remote deployment. So we needed to change the way we ship the product, from a hardware perspective. Laptops and RFID readers were not the way to go. This was issue no. 2.

Issues 1 and 2 were both solved by switching our mindset from laptops to mobile devices (mostly Android smartphones). They were sturdy, easy to use and we could port our app to them. More importantly — they all had an NFC reading chip. What is an NFC chip? Glad you asked that. It’s a chip that reads some special kind of RFID tags that only work in proximity to the reader (NFC = Near Field Communication ).

When we thought we’d solved all of the issues a strange request came from an upcoming festival in the middle of a deserted island. The request was to run a closed loop payment network (checked) on a deserted island, on mobile devices (checked), without any internet connection (definitely not checked).

The island where it all started

Making payments work offline

This was a tough one: our whole system was based on a cloud server processing sales and wallets, authentication and identities. There was no way that we were familiar with that could work in providing this closed loop without internet connectivity. So we started brainstorming.

At the time we witnessed protests against undemocratic changes to our country’s legislative structure. Protesters were organizing and communicating via mobile phones. When protests got bigger, radio communications were jammed. They had to resort to another way: using their Bluetooth connections to communicate via Firechat, a peer to peer messenger app. What Firechat did was turn each phone using it in a communication relay. Truth be told — it didn’t always work. But it showed us a direction we were going to head into.

We started working with 6 months left to deliver a product that would process payments on a deserted island, in the middle of the Danube river, where no Internet connection was stable. Did I mention the solution was going to be used by 5000 people?

We made it work with a distributed ledger approach that would move the data across mini-servers being run on sets of Raspberry Pi’s. We moved the data across an WiFi network in a secure way and basically created a mesh-network of servers and client devices that were running the apps on mobile phones.

Oveit Edge Payments v1

The day of the festival came. We started late. Not only was there no internet but there was no stable electricity. It was raining. We had sand and dust everywhere. And I mean everywhere. One of the routers was fried due to unstable electricity and we had to drive 400 km to buy a replacement. Sony assisted in providing the mobile devices that were used as POS’s for vendors and top-up points.

Setting up the WiFi network was the hardest part. As electricity was unreliable, it was hard to test which part of the network was working or not. We basically created a network that beamed data from the riverwalk, where attendees would arrive and pretopup credit, to the island, covering a very, very large area, using just routers, access points, raspberry pi’s, mobile smartphones and our software.

It was fun and hard. Monitoring was unlike everything we’ve ever done. The music was running non-stop so there was always someone buying something. We were on constant alert.

It worked.

Not perfectly, but it worked. People were amazed how they couldn’t reach their Instagram profiles but they would just tap their wristband and a payment was made. To a certain degree — it was magic. The perfect blend of technology, a bohemian decor and something emerging right in front of our eyes: an economy and a sort of edge-society. Cut off from the world, the cloud, the big city life, people were enjoying a private festival, with all of the convenience of what we now see as our core pillar in the society we live in: the economy.

When I say economy, don’t think of it as something the government would set up and carefully curate. Don’t think of complicated formulas, central banks and banks in general. Think of it as the basic human behavior of exchanging goods and services. Think of our natural tendency to collaborate with one another and the logistics that emerge from it. Think of what money used to be before we start calling it money: a convention between groups that they will exchange the value of their work through a shared medium.

A new perspective on the world

It took us a while to understand what we were creating. In the back of our mind, the idea started to taking shape as soon as we saw the people on the island interacting with one another. But it took another two years to understand how we fit into the world and how we can make it better.

As the festival was ending I had to hop on a long-haul flight to Hangzhou, China. We were selected to present what we just tested on the island in an International Stars contest.

At the moment I was going through a bit of an issue in my medical condition that made it hard to travel long trips but I chose to go on the trip. First off — I was in charge of product development so I had to present what we did and how we did it. Second — I’ve never been there so I was curious about the country and how the society was evolving.

It was amazing. We discovered many things. One of them was that our technology was not about events. It was, as financial technology usually is, about society and the way that people interact with one another and share value. We’ve seen how WeChat and AliPay changed the Chinese society for the better and how a new wave of different payments technologies were coming. We decided to focus on the opportunity to improve the world with our tech. We just didn’t know how an events company can play a role in the big financial world.

It was at the beginning of 2019 that we received an investment and moved our HQ to Austin, Texas. In just three months we went from an event company that was doing event payments to a company that was doing a new type of payments — As David Smith suggested, we called the technology Edge Payments — payments at the edge of the cloud.

The Oveit Edge Box — the hardware we use to make edge payments work

You see — most of the payments go through a global network of banks, payment processors, gateways, card acquirers and so on. Basically your data travels two times across the world before you buy the ice cream in front of you, if you use your credit card. With cash it’s different. Hand over the note and that’s it.

What if there was a way to process payments where they happened (what we actually did with our tech) and how could this change the world?

We went down that path and we discovered that what we did was offer our customers the benefits of running their own economy. At a small scale, restricted to several geographic virtual areas but an economy nevertheless.

They could onboard vendors and buyers, tokenize and incentivize behavior, add fungible and non-fungible payment tokens. At their fingertips was the potential to create and manage small scale economies. Economies at the edge of the cloud. While still connected to the outside world and money transfers still regulated by traditional means, their mini-economies could become flourishing islands of creative behavior.

Economy as a Service

What we understood was that our technology could impact more than events. It could, theoretically, impact the economy in a way that blogs, social media and tweets and videos have impacted the media companies. It created the power for communities to gather around common ideas, concepts and a new type of influencers.

We understood that Oveit Pay, the closed-loop payments app for festivals, could do more. It could empower communities: from a hotel resort to a neighborhood. From an island in the Atlantic to a city in the US Midwest that has its value extracted via global trade routes, leaving it lifeless and without a future. From Europe to the North Americas and from Japan to South Africa, we understood that we are all basically the same and so are our communities and their needs.

We understood that while the globalized world has great benefits, the strength of our society still sits with communities and these communities need to be empowered to create and retain wealth in their local ecosystems.

This is what we now call “Economy as a Service”. Whether it is online (in a game) or offline (in a city, a festival or a neighborhood) our Economy as a Service tool can connect and help its members form a community.

The mission of Oveit Pay

Our mission is to empower communities to empower themselves. In an increasingly complex world where everything is fast moving and global wealth is generated at the edges and collected at the center, something has to change.

Oveit Pay v2

Oveit Pay v2 gathers in one app what we have learned about the world in the past years. It is a tool for communities across a vast spectrum, from cities to virtual communities in games, that want to empower themselves. To do this, we think they are missing a key component. Their own economy. A way to retain the value they create and shape the way it is formed by its members.

It is a complicated mission and it may not be the best way to go. But if we want to improve the way we live today and have a hope at a better future we need to improve on two of the most important inventions of our species: our social structures and the concept of money and how it’s being moved around, with an emphasis on “moved”.

The world is struggling with economic inequity. The global issues following the Coronavirus outbreak will only add to the existing economic issues. We think we can play a part in providing a better future to all human communities, with a tool that helps when help is needed.

This is the mission of Oveit Pay — to bring economic power to communities. To help communities emerge, take shape and become stronger. Make their members’ lives a little better and help them live more fulfilled lives, doing what they love.

Mike Dragan
Oveit COO

What is the difference between 360 and VR Live Streaming?

We’re all used to the natural ways in which we perform things such as in-person interactions, tasks that require us to be physically present and travel to different places. However, there may be times when our willingness to perform such tasks is limited because of cost, time, or other unexpected circumstances. Even if the physical and digital worlds result in different levels of interaction and engagement, there is a lot of effort and creativity placed into eliminating these boundaries to deliver digital experiences and shape them in a way that our physical absence won’t change its outcome.

The variety of video chat and conferencing platforms are doing a great job to eliminate these boundaries between our physical and digital worlds. They enable us to share our thoughts and experiences from all over the world with little to no effort. Yet, there are also richer and more immersive ways for us to connect with one another, explore the world and feel like we are physically there. This is where 360-degree and VR live streaming have a saying. We’ve only seen a glimpse of how these technologies can influence our worlds. Virtual reality and its partner, 360° video, have been around for decades. They’ve been limited by computing power and bandwidth capabilities, but that’s not the case anymore.  

Virtual Reality Experience (VR)

Virtual Reality uses computer technology to create a simulated environment. Unlike other interfaces, VR positions the user inside an experience. It is delivered through an artificial environment or a real-life remote location that enables the user to interact with a 3D world by putting on a head-mounted display (glasses). Its main goal is to make us feel like we are there mentally and physically. As you turn your head while wearing the headset, the world turns with you in the same time.

Major events broadcasted in VR format

This immersive technology has already served some major events around the world, making it available for consumers in a live VR broadcast format.

BT Sport and the UEFA Champions League final – It was the first time ever when a major football event was broadcasted live in VR. The event was filmed using 360° cameras and viewers were able to watch the game as if they were part of it.

Fortnite’s Travis Scott virtual concert – Not long ago, Fortnite players put their guns down to watch a digital avatar of Travis Scott teleport around a beach, launching audience members into outer space. It was the game’s biggest event ever and it was all about a 10-minute virtual concert.

2016 Summer Olympics – Samsung and NBC partnered up to make the summer Olympics available in VR for the first time. Users were able to enjoy 85 hours of live immersive content, including all kinds of sports. It was a great opportunity for people around the world to have a sense of presence and participation, right from their own houses.

About 360° Videos

Similar to the VR Experience, 360-degree videos are designed as well to deliver immersive experiences for the end user. The media and marketing materials often promote these two technologies as a whole, but there are actually two separate experiences. While watching a 360 video, the viewer can move left or right, top or bottom within a defined space. On the contrary, a VR experience can seem endless, without a finish line. Unlike standard live video, the image that viewers see is not established by a cameraman. Instead, the viewer has total control regarding what is seen and when it is seen. Another difference lies in the fact that no special hardware is required to watch a 360° video. It can be viewed by using a headset, a mobile device, or a PC. In other words, viewers can watch 360-degree videos on a regular flat 2D screen, while VR requires those fancy glasses.

Compared to traditional live streaming, 360° live videos must be broadcasted through a special camera and software. Vimeo is among those platforms that decided to adapt and enable users to upload 360° content.

IBTM 2019: What did we showcase in Barcelona ?

Last week Oveit attended IBTM 2019 in Barcelona as one of the leading Tech Watch Award shortlisted startups. IBTM is the largest business and travel meetings event in the world, where professionals meet to discuss the future trends of the event industry.

We’ve had a blast. It was an overwhelming event and the good people at Reed Exhibitions do a great job at running it and making it the global center of business and travel meetings.

Cashless payments for event professionals and the travel industry at IBTM 2019

In the past two years Oveit has been steadily evolving from events registration and access control to cashless payments, audience engagement and prepacked benefits. We’ve basically moved from an event registration tool to one which event planners can use to create an event economy. This is what we presented at IBTM 2019.

Cashless payments on mobile - Oveit

What we noticed was that a lot of the revenue and the experience around an event is outside of the planers’ traditionally accessible channels. For festivals, as an example, most of the revenue is generated not in ticket sales but in the economy developed around the festivals. Local vendors, bars, merchandising and more.

Our technology relies at heart on NFC contactless payment tokens (such as wristbands or cards) which visitors can top up and use to pay within the event venue. In the background, the event organizer manages the cashflow and distributes funds to vendors, usually retaining a certain management fee.

A new way to see the business of events and venues

With what is usually called “closed loop payments“, events and venues generate an extra stream of revenue but most important – they get access to relevant data.

With our technology event planners are able to plan their future events based on actual behavior data. They get an insight on what is popular and what is not, what is a key consumer driver and what are the most loyal visitors for their experiences.

This creates a virtuous cycle of better experiences, which generate more revenue and data and better options for the planner to improve on previous experiences.

Prepacked perks and benefits launched at IBTM 2019

At one point we’ve asked ourselves – what makes a ticket valuable? What do people care about when they’re buying a ticket. We asked the event visitors and the event planners. The answer is a bit of common sense: they are actually buying the experience that ticket entitles them to.

Cashless payments end user apps on mobile - Oveit

With this in mind we went on and developed our prepacked perks technology where one ticket can hold more than just the access to an event. It can hold access to specific sub-events, goods such as a t-shirt or a hamburger, services such as a cruise line or accommodations to the hotel.

With the prepacked perks, which can be stored on mobile devices, on RFID wristbands or even on biometric signatures, the experience can be vastly extended. Perks make the conventional limitations fade away for event planners and venues.

Facial biometrics access and payments

We’ve worked with some of the best experts in machine learning in computer vision to provide event planners a way to use biometrics in their event.

Facial biometrics for events and venues - Oveit
FacePay can hold digital balances and prepacked perks

By pairing facial features with access control rights, visitors can just
walk in, without a need to take out their ticket or unlock their smartphone. The scanning apps are loaded on smartphones, without a need to buy or rent hard to install equipment such as HD cameras or powerful computers.

At the same time they can use their face to pay for goods within the venue, just as they would when buying with a contactless card.

Edge Payments

Probably the most interesting technology we have presented at IBTM 2019 in Barcelona was edge payments .

Edge payments equipment. Edge computing for large events and venues.
Oveit’s Edge Payments box and interfaces.

So what are edge payments? For one – they are a hybrid between closed and open loop payments. A way for visitors to top up a digital balance in a closed loop economy and use it to pay for goods.

The second attribute and the most important one is that this technology allows operating payments even when the internet is down. This is usually due to massive numbers of visitors in one place, overloading the network or just plain old technology crashes. It’s great for large venues or conferences and especially festivals.

Oveit’s tech operates at the edge of the cloud, making sure that everything is operational even when all other systems have fallen.

It was a pleasure meeting all the people that stopped by our booth and the ones we visited at theirs, especially in the hospitality industry, where we see great opportunities for our technology to improve experiences.

Barcelona is an amazing city and IBTM fits right in, especially for event and
hospitality professionals. See y’all soon!