June 24th, 2019
Visa Inc, a United States based global payments technology, which was first made public in 2016, is now live. It aims to speed up cross-border payments with its business-to-business payment network launch, 11 June 2019, calledVisa B2B Connect.
In 2016, Visa announced its plans of having a blockchain powered business-to-business payment service. Visa initially worked alongside Chain, a cryptographic ledger systems builder,and other tech-firms,and developed Visa B2B Connect network.
The network will simplify international payments. Businesses can make payments directly from their bank to the beneficiaries’ bank. In cases where smaller banks needed to use an intermediary bank to help complete money transfers, this intermediary is of no use when using the Visa network. In turn, it reduces the number of processes required to complete a payment.
The Visa B2B Connectnetwork borrows some aspects of blockchain technology as it was developed alongside Chain, which is a blockchain startup. Businesses seeking to make payments to 30 markets will find the Visa B2B Connect launch beneficial. In addition, before the close of 2019, it will have more than 90 corridors expected to be covered thus providing for a wider coverage.
With the help of this service, Visa corporate clients can sidestep the slow corresponding banking network operations to ease and quicken payment process. The key objective is to eradicate slow banking processes when handling international payments. The initiative has opened up near instant international payments using a system, which is partly powered by distributed ledger technology (DLT).
In a statement, Kevin Phalen, SVP, global head of Visa Business Solutions said:
“By creating a solution that facilitates direct, bank to bank transactions, we are eliminating friction associated with the key industry pain points.”
The global head of Visa Business Solutions indicates that the network does not fully operate on a distributed ledger but that it has only borrowed some elements of DTL. This will allow for more payment information as compared to traditional monetary systems.
It will be able to gather relevant information and keep record with the aim of preventing the repeat of transactions. For information concerning clients who are regular, the transactions will become better considering that the record is complete all the time without comparing it at the different levels of transactions when dealing with traditional banking systems. However, with the new Visa network, the direct transactions make it easier to submit relevant information.
Working on a global market diversifies the target market. Traditionally, payments required intermediariesto ensure that the financial transactions adhere to the countries’ laws and regulations. In an effort to make the world a smaller financial village, Visa’s initiative has gone a long way into minimizing the number of required transactions, eliminating several financial intermediaries, as well as quickening the process despite the different fiat currencies in different countries.
Visa B2B Connect system worked closely with Chain, which is responsible for building blockchain to support financial systems in its initial iterations. However, Hyperledger Fabric undertook the distributed ledger technology aspect of the network with help from IBM. Hyperledger Fabric is an open source distributes ledger developed by agroup, whichwas led by Linux Foundation.
Visa played a significant role in Chain’s $30 million funding round in autumn 2015. In November 2017, Visa B2B Connect was rolled out in a pilot phase to first test its bank-to-bank connections.
To complete the process, Visa collaborated with other market giants in different fields to ensure flawless operations. In total, Visa collaborated with the tech global giant, IBM, an e-payment operator Bottomline Technologies as well as fintech firm FIS.
Visa B2B Connect is part of its move to expand its reach beyond their credit card payments, where it is a key player across the globe. Blockchain technology is changing the financial industry and this initiative is proving fruitful for global B2B businesses.It not only encourages global business interactions but it also boosts efficiency and adequacy when making global payments.