VTB Bank has implemented a new method of making online payments by connecting to the blockchain platform, Smart Fuel, provided by Gazpromneft-Aero (operator of Gazprom Neft’s aviation refuelling business).
The technology has reduced the transaction time from 4-5 days to just a few minutes, while also significantly cutting down on airlines’ costs.
With the new payment system, based on smart contracts, airlines can instantly pay for the fuel directly through fully secure financial transactions in real time, 24/7. The parties to the digital mutual settlements no longer need to make advance payments or apply for bank guarantees, as was the case before, which reduces their costs and speeds up the transaction.
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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 job 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 all the participants concerned, which is another important advantage of the Smart Fuel platform. Information from the system is synchronised into the airline’s electronic logbook as well as into the digital aviation fuel accounting system of the refuelling lorries – this makes the refuelling and the data exchange process fully automated.
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Viktoria Vanurina, Senior Vice President at VTB Bank and Advisor to the First Deputy President and Chairman of VTB Bank Management Board, commented: “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 optimising 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 optimised the system of mutual settlements with its customers. In the future, it will enable airlines to save money on advance payments.”
Anatoly Cherner, Deputy Chairman of the Management Board, Deputy CEO for Logistics, Processing and Sales, Gazprom Neft: “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.
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