Big-four auditing firm Deloitte and London-based fintech company SETL have partnered to create a blockchain-based contactless card that enables retail payments to be processed and settled instantly, Reuters reported.

Over 100 users have successfully tested this payment card and it is expected to go into the commercial production in 2017. The test was carried to pay for cupcakes in sterling, with both customers' and merchants' bank balances updated in ‘live-time’. The card has been created for customers of FTSE 250-listed Metro Bank.

"This is fiat currency, it's real money. It's not a form of cryptocurrency or anything else; it’s money you can go and take out of the bank and spend," Peter Randall, CEO of SETL said. He also stated that the payment card would allow merchants to offer payment services to their customers at lower cost.

The payment card makes use of Deloitte's Smart Identity blockchain system, with customer identity records stored and certified by Deloitte and then sent to SETL in order to set up user credentials.

"This underlines the importance, in the new distributed ledger world, of identity management," Deloitte partner David Myers said as reported by Reuters. “What this allows people to do is to effectively make a payment from their account to the merchant’s account, completely encrypted end-to-end, without having to go through all the existing very expensive legacy infrastructure.”