When Will Bitcoin Join the Mile-High Club?

Both flights and in-flight purchases are now commonplace in ordinary people’s lives, so it’s time to start looking for new ways to pay.

Thanks to the interest in payments bitcoin has given me, I’ve spent more time observing how they’re handled in unusual environments — particularly airplanes.

Airlines love to sell stuff to their captive audiences. Booze, duty-free and extras — someone even told me about a Chinese airline that had a live salesman standing at the front, pitching products into a microphone for most of the flight.

In-flight purchases have been common for decades. With the rise of low-cost carriers (LCCs) worldwide such purchases have increased exponentially, as those airlines charge for all onboard services including meals, all drinks, and access to the entertainment system.

You see so much in-flight commerce today it resembles a mile-high cafe, or mall.

How are you supposed to pay?

Once upon a time, some airlines accepted cash payments in-flight — generally for domestic only. Staff described it as a painful experience, juggling change in narrow aircraft aisles and customers paying with large bills.

Given the number of different passports traveling on a typical international flight, the thought of all those people trying to use their national currencies in cash sounds farcical. Airlines who accept cash usually choose one currency per flight and, if it isn’t the one you’re carrying, tough.

As of 2009, All US carriers have been cashless. Virgin America was always so.

As a result of physical cash hassles, most cabins worldwide are now credit-card only, or offer a direct-debit payment system from customer bank accounts. The latter isn’t an option for those who don’t have bank accounts in that country.

Some LCCs also have a voucher system, where passengers choose the optional paid services they want before embarking, and hand over the vouchers once in the air.

Cabin crew now walk around with retail-style card readers on their carts, inviting customers to swipe and/or enter a PIN. But like Apple Pay and e-cash cards, this is just another electronic transfer network layered over the same old national currency and account-based system.

These methods all work to an extent, but they sound more like hacks than actual solutions.

So what’s a better alternative?

Most readers here can probably guess where I’m heading. With all the complexities of international commerce crammed into a tiny physical space like an airplane cabin, couldn’t bitcoin be considered as an option?

Over the past few years, several airlines have announced they would accept bitcoin as payment for flight bookings. While they haven’t implemented it for in-flight payments, it highlights a degree of interest in the industry.

They included airBaltic, who announced in 2014 and still list bitcoin as a payment option. Others were LOT Polish Airlines and Air Lituanica, though neither appears to mention bitcoin on their corporate websites nowadays (Air Lituanica is in fact no longer in business).

Virgin mogul Richard Branson is a well-known proponent of bitcoin, but so far only his Virgin Galactic business has announced it would accept bitcoin payments, for future space flights.

Could Bitcoin really work in-flight?

Until recently, internet access on flights was almost non-existent. But it’s becoming increasingly common. It won’t be long before everyone has an internet-connected smartphone in their hand for the entire flight — that dystopian-sounding idea could sound more acceptable if bitcoin wallets were popular with passengers and staff.

It’s much easier for the cabin crew to hold up a smartphone wallet than a credit card reader, and there’s no need for all that extra tech infrastructure or relaying transaction data back to the central server. Bitcoin comes with its own back-end.

Flight times are more than long enough to wait for bitcoin transactions to confirm — even the low-fee ones. And it’s not as though customers can run away before their transaction is finalized.

Radical solutions driven by practicality

There are still a few issues to work out before bitcoin could be considered as a serious option for in-flight payments (whether the bitcoin network itself could handle the transaction load is one of them).

But then, airlines sometimes need to pioneer practical, forward-thinking ideas out of sheer practicality. A flight is a unique environment, which often require unusual solutions.

Think about unisex toilets. Airline toilets don’t care what gender you are, or choose to be. Everyone lines up together. Planes don’t have the space to be fussy about social norms like that and no one complains.

If someone is drunk, rude and disorderly, staff are allowed to tie them up. Service staff elsewhere would love to have that ability.

Those are two examples of solutions that work on airplanes but would be radical in regular daily life. With that in mind, Wouldn’t a radical new payment system that worked internationally for everyone equally, without the need for extra equipment, be just as practical?

2 May 2016