Recently, at the Money 20/20 event in Las Vegas, the multinational credit card company Visa showcased a prototype connected automobile, with an interesting app built into its dashboard. A collaborationg between Visa and DocuSign, it uses the Bitcoin blockchain to record several types of contract information.
"Visa is the trusted global leader in the payment industry, and is relied upon by millions of merchants and billions of consumers around the world. DocuSign is the trusted global leader in Digital Transaction Management and eSignature. Together, our Labs teams are the perfect partners to help consumers and companies fast-forward their journey to becoming fully digital."
- Keith Krach, DocuSign Chairman & CEO
Founded in 2003 by Tom Gonser, who also founded NetUPDATE, DocuSign provides legacy electronic signature technology and digital transaction management (DTM) services, to more than 100,000 companies. Using DocuSign, more than 50 million users in 188 countries can sign, send and manage documents digitally on any device. DocuSign's digital solutions were created to remove the need for faxing, printing, scanning and overnighting documents, making these processes more efficient and cost-effective.
DocuSign's user base is also growing rapidly, with more than 50,000 new unique users joining the DocuSign Global Trust Network every day. According to the company, 10 of the top 15 US financial services companies, 13 of the top 15 US insurance carriers, and more than 1,000 credit unions all use DocuSign.
DocuSign already has plenty of competitors for blockchain-based timestamping and document-signing applications. Solutions provided by BlockSign, OriginStamp, ProofOfExistence, to name a few, most of which are completely free to use.
However, with its growing base of users, DocuSign is the heavyweight champion in the space, and it may be unlikely that their users ever get the chance to hear about non-mainstream alternatives. Before their usefulness can reach the mainstream business world, DocuSign has more than enough time to integrate blockchain solutions into its product offering.
Ironically, they may not have started to extensively examine how the blockchain can be used for business, had Visa not approached the company. "When a customer, partner or investor wants to partner with us to create new, game-changing innovation, we're thrilled," stated Krach.
Visa is both a partner and investor, having become a Docusign shareholder in 2014. The purchase facilitates “ways to enable customers to prepare, execute and manage digital transactions and integrated payments safely and securely.”
Ron Hirson, DocuSign's Head of Product, told Brave New Coin that the company hadn’t used blockchain technology before collaborating on the proof-of-concept. However, DocuSign is now in “exploration mode,” and learning “all the ways that the Blockchain could be relevant.”
Meanwhile, Visa had been working on its original connected car proof-of-concept, which was demonstrated in March at the Mobile World Congress event in Barcelona, Spain. For that project, Visa worked with Pizza Hut and Accenture, testing mobile and online purchases on the go.
The connected car demonstrated in Spain integrated Visa’s online payment service, Visa Checkout, alongside cellular connectivity, Bluetooth Low Energy (BLE), and Beacon technology deployed at Pizza Hut restaurants, managed by Accenture. The car allows customers to order pizza on the fly, and pay for it from their car's dashboard.
"We see a future where car commerce goes far beyond fuel pumps and drive-thrus, becoming a fully automated experience among the Internet of Things. Anything you buy from your car, or for your car, can be enabled by automatic payments: whether it's a lease payment, insurance or anything governed by a contract. Tolls, maintenance services, music downloads, parking and even charges from the DMV could all be automated through a Visa token that is securely stored in your car."
- Jim McCarthy, Visa Executive Vice President, Innovation and Strategic Partnerships
The company's latest attempt at revolutionizing car commerce is a further step towards Visa's vision of turning a car into a smart asset among the Internet of Things. The first connected car showcased in Spain had food ordering capability, to give car owners a pleasant in-car experience while paying with their Visa card. However, with DocuSign, Visa has set its sight higher, tackling the complex process of car buying and leasing.
DocuSign created an app for Visa's connected car, which integrates with the bitcoin blockchain, in order to record and update contracts, to simplify the car buying and leasing processes, and to bring secure payments and smart contracts to the car itself.
This proof-of-concept pairs DocuSign's eSignature solution and APIs with Visa's token service, and the blockchain, in order to offer secure payment processing. Drivers can manage services such as auto insurance, lease payments and even tolls and parking, all through DocuSign's app built into the dashboard.
“Both Visa and DocuSign have a common vision to help consumers and organizations transact business in confidence. Our mutual objective is to eliminate paper-based transactions. For Visa, the competition is cash, for DocuSign it is paper. Visa is proud to invest and support DocuSign as it creates a digital standard that will help everyone transact business more conveniently, quickly and securely around the world.”
- Ryan McInerney, Visa Inc. president
DocuSign explained that the process starts with registering the car's identity on the Bitcoin blockchain. The driver then chooses the lease options and can DocuSign the lease right there on the car dashboard. Insurance options are then chosen, DocuSigned, and everything is updated on the blockchain. To accomplish this, however, the customer must link their Visa card details to pay for the lease and insurance.
"The partnerships we are developing, are all about making visa the preferred way to pay for the forseable future.”
- Jeremy Nicholds, Visa Europe Executive Director, Mobile
First proposed by cryptographer and bitcoin developer Nick Szabo in 1994, smart contracts were originally created with exactly this purpose in mind. “A smart contract is a computerized transaction protocol that executes the terms of a contract. The general objectives of smart contract design are to satisfy common contractual conditions (such as payment terms, liens, confidentiality, and even enforcement), minimize exceptions both malicious and accidental, and minimize the need for trusted intermediaries,” Szabo wrote at the time.
Today, projects like Ethereum and many different businesses are finding innovative ways to pair the blockchain to smart contracts, but among the first proposed usage was for car leasing and insurance.
“Smart property might be created by embedding smart contracts in physical objects. These embedded protocols would automatically give control of the keys for operating the property to the agent who rightfully owns that property, based on the terms of the contract. For example, a car might be rendered inoperable unless the proper challenge-response protocol is completed with its rightful owner, preventing theft. If a loan was taken out to buy that car, and the owner failed to make payments, the smart contract could automatically invoke a lien, which returns control of the car keys to the bank. This smart lien might be much cheaper and more effective than a repo man.”
- Nick Szabo
It took 21 years, but it appears we finally have a prototype for smart property; in a car, no less. However, Visa has not revealed any plans for the contract to disable the car if the lease is not paid on time.
Automotive leasing is gaining popularity because customers can drive newer and better cars for smaller monthly payments, compared to purchasing a car. However, a common complaint is that car leasing is complex and time-consuming.
"Leasing a new sports car – or any car for that matter – should be fun and exciting, but lengthy paperwork and arduous processes often diminish the experience. This proof-of-concept makes it easier and faster for customers to get out the door in their new car by bringing together smart contracts and payments so that customers can electronically sign all pertinent documents and seamlessly pay in one fully digital experience."
- Ron Hirson, DocuSign Head of Product
Although the proof-of-concept is for leasing cars, Visa is targeting “anything governed by a contract,” including purchasing a car. According to Deloitte's 2014 Global Automotive Consumer Study nine out of ten US consumers want an extremely efficient buying process more than consumers in other countries.
“By 2020 it is estimated that more than 250 million vehicles worldwide will include some form of embedded connectivity. As the number of connected cars on the road increases, so does our ability to bring secure online commerce to consumers everywhere. We initially focused on a specific use case – ordering a meal on your way home – but we envision a world where consumers can seamlessly make many of their everyday purchases from the car.”
- Bill Gajda, Visa Inc. senior vice president of Innovation and Strategic Partnerships
Despite Visa's apparent competition in bitcoin, the partnership between Visa and DocuSign is great news for the bitcoin community. DocuSign and Visa could both have a huge, positive influence on bitcoin, especially if cars like this one hit the road.
While more information is needed before DocuSign can consider offering any other blockchain related services to its customers, with such a huge user base, DocuSign could potentially introduce bitcoin and the blockchain to an enormous market. Customers using DocuSign's app might not even realize they are using the blockchain, since the app would automatically record information on the blockchain, without the user's involvement, just like the proof-of-concept with Visa.