VTB and Gazprom Neft unveils blockchain-enabled payments
By Pavithra R
VTB Bank has announced implementing a new method of making online payments by connecting to Smart Fuel, a blockchain platform provided by Gazpromneft-Aero (operator of Gazprom Neft’s aviation refueling business).
With the new payment system, which is based on smart contracts, airlines can instantly pay for the fuel directly through fully secure financial transactions in real-time, 24/7. The technology has reduced the transaction time from days to minutes while significantly cutting down on airlines’ costs. Unlike the case before, the parties to the digital mutual settlements are no longer required to make advance payments or apply for bank guarantees, which reduces their costs and speeds up the transaction.
“The development and implementation of digital solutions along the entire value chain is one of our strategic priorities. Thanks to modern technologies, we increase the efficiency of production and transportation, develop customer services, and can guarantee the delivery time of oil products to our customers. An example of this approach is the successful integration of blockchain technology into aviation refueling processes. The new digital Smart Fuel system simplified the work of our partners as much as possible and increased the financial security of mutual settlements, which is extremely important in the current macroeconomic conditions. Our development has a high potential for scalability for the entire industry,” said Anatoly Cherner, Deputy Chairman of the Management Board, Deputy CEO for Logistics, Processing and Sales, Gazprom Neft.
To refuel an aircraft, the pilot just needs to make a digital request to buy fuel from a tablet. The bank automatically puts a hold of the required sum from the airline’s account until the refueling process is completed. Once the refueling has been carried out, the funds are at once transferred to the bank account of Gazpromneft-Aero.
The details of the completed blockchain enabled transactions are documented and made available to the participants concerned. Information from the system is synchronized into the airline’s electronic logbook and into the digital aviation fuel accounting system of the refueling lorries.
“The future has already arrived, and I’m referring to the digital economy. This project is an excellent example of how a combination of industry, technology, and financial expertise can benefit all the sides involved. With its extensive experience in optimizing financial processes and introducing advanced technological solutions in the transaction services market, VTB has implemented a payment module that covers the settlement part between the fuel supplier and airlines, slashing the payment transfer cycle to just a few seconds. Due to this blockchain solution, Gazprom Neft has optimized the system of mutual settlements with its customers. In the future, it will enable airlines to save money on advance payments,” said Viktoria Vanurina, Senior Vice President at VTB Bank and Advisor to the First Deputy President and Chairman of VTB Bank Management Board.