Commerzbank, a Germany-based international commercial bank with a presence in more than 50 countries, has collaborated with Daimler Trucks to conduct Germany’s first distributed ledger technology (DLT) powered machine-to-machine (M2M) payment, according to a press release on August 8, 2019.
Machine to Machine Payments
Commerzbank, a leading financial institution financing 30 percent of Germany’s foreign trade, has achieved another significant feat in its history.
As stated in its press release, Commerzbank has collaborated with its research and development and Daimler Trucks to conduct a pilot test for blockchain-based machine-to-machine (M2M) payments, making it the first German bank to reach such a milestone.
For the uninitiated, M2M payments simply refers to a payment transaction entirely conducted between machines without any form of human intervention.
Specifically, the team says the M2M pilot seamlessly orchestrated a fully automated payment process between an electric charging point and a Daimler truck.
Explaining how the M2M payment transaction worked, Commerzbank says it issued euros on a distributed ledger and made it accessible to the truck, which in turn processed the payment via smart contracts.
DLT Revolutionizing the Machine Economy
While the machine economy has seen steady growth in recent times due to the increasing digitalisation, autonomy and interconnectivity of machines, as well as the ability of machines to mutually settle payments, Commerzbank says current payment systems are not yet able to meet the demands of the M2M ecosystem.
Against that backdrop, it’s now looking to fix the payments gap in the M2M industry.
Commenting on the success of the blockchain-powered M2M payments pilot, Stephen Muller, Divisional Board Member Transaction Banking at Commerzbank said:
“After successfully digitizing securities transactions in past pilot projects, Commerzbank is now focusing on blockchain-based payment structures. As a financial institution, we see our mandate as creating innovative digital payment architectures for our clients.”
Of a truth, Commerzbank is one of the top financial institutions that has put in great effort into exploring the potentials of DLT globally.
In February 2019, Commerzbank joined forces with Siemens and Continental to conduct a blockchain pilot aimed at slashing the time required for funds to get cleared in the money market.
Earlier in March 2019, BTCManager informed that Commerzbank had collaborated with Deutsche Boerse to carry out an $11.3 million repo transaction on the blockchain.
This latest M2M payment pilot test has shown that both the charging and payment processes of electric vehicles can be performed automatically without human interaction.
The team firmly believes that this may lead to “efficiency gains in logistic chains while also leveraging considerable potential” as vehicle automation continue to gain traction.