JPMorgan Chase (JPM) is expanding the use of its blockchain technology to help reduce the number of global payments rejected by errors, the Financial Times reported on April 21.
The United States financial giant is adding new features to its Interbank Information Network (IIN,) which is now used by more than 220 banks around the world. The technology was initially designed to help institutions share payments data in real time — cutting delays in processing times.
John Hunter, JPM’s head of global clearing, said it has built a new feature that can instantly verify whether a payment is heading to a valid bank account. At present, transactions can be rejected days after they were sent because of typos in sort codes, account numbers and addresses. He told the FT:
“Banks straight through processing rates are in the mid-80s to mid-90s. It’s that gap — the 5 to 20 percent of payments — that have to be assessed by operations where we’re trying to alleviate some of that pain.”
The new feature is going to be live by the fall, and while the IIN is currently free to use, the report revealed subscriptions may be introduced over time.
Meanwhile, JPM is also trying to attract fintech firms to its network by enabling them to develop applications in a specially created sandbox where they can gain access to data modeling, file transfers and secure messaging. Hunter told the newspaper that this could remove many hurdles for startups, adding: “Developers only need to bring their intellect.”
JPM first launched IIN as a pilot scheme in 2017. As reported by Cointelegraph in January, experts at the financial institution believe the technology will provide benefits to banks and financial systems.
In February, the banking giant announced it was launching its own cryptocurrency, dubbed the “JPM Coin,” to increase settlement efficiency. Later that month, CEO Jamie Dimon suggested that the coin could evolve to have a consumer use.
Some crypto executives have been dismissive of the JPM Coin, with Ripple CEO Brad Garlinghouse claiming it “misses the point” of crypto altogether.