Microsoft Corporation (NASDAQ:MSFT) has entered into a partnership with Australian travel booking website Webjet to create a blockchain solution for online booking.
The proof of concept solution created by the two firms is aimed at completely changing how the travel industry deals with online payments for hotel bookings. The companies have been working towards the creation of smart contracts that are designed to resolve some of the problems that are created by data mismatches.
“Every day there are millions of transactions taking place and a single hotel stay could involve five or more transactions in the distribution chain,” revealed John Guscic, the managing director at Webjet.
The managing director also stated that the marketplace is subject to a lot of data discrepancies because of a large number of bookings going through multiple booking systems. He revealed that roughly 5-10% of all bookings can be affected and this means billions of dollars are at stake. Blockchain technology is a distributed and shared ledger that offers numerous advantages such as finalizing payment. It also has the ability to store the entire transaction and it facilitates cryptocurrency such as bitcoin.
Both Microsoft and Webjet have been working on the technology for the past six months and they are convinced that it will completely transform how the transportation industry manages and processes travel bookings and online payments. They believe that it will help to reduce costs as well as boosting security.
“The dirty secret of the global hotel industry is that roughly one in 25 transactions globally end up with breakage where someone provides a service and doesn’t get paid for it … which is an enormous number,” stated Guscic.
Errors such as those talked about by Guscic usually emerge because there are numerous intermediaries passing forward the information. Somewhere along the way, some details get lost or end up not being followed up. Guscic also revealed that his company and Microsoft discovered these challenges and decided to exploit blockchain as a solution.
Microsoft stock closed the latest trading session at $60.42.