Visa Set to Join the Expanding Field of Blockchain-Based International Payment Providers
Visa launches a blockchain-based centralized payment settlement service for international business transactions, challenging USC and Ripple.
Visa has launched a payment system for business-to-business (B2B) transactions partially based on blockchain technology. The United States payment behemoth says its platform, called Visa B2B Connect, offers seamless cross-border payment processing for institutional clients without going through the complex web of third-party intermediaries.
In doing so, Visa becomes the latest entrant into the blockchain-based payment processing arena. This move brings the company into direct competition with cryptocurrency startups like Ripple and mainstream players, such as Barclays and BNY Mellon with their Utility Settlement Coin (USC) project under the aegis of the Fnality Consortium.
Visa B2B Connect — three years in the making
Visa first announced plans to build a blockchain-based network for business payments back in 2016. At the time, the credit/debit card payment giant said the service would be developed in partnership with blockchain startup Chain.
According to a statement issued by the former executive president for strategic partnerships and innovation, Jim McCarthy:
“The time has never been better for the global business community to take advantage of new payment technologies and improve some of the most fundamental processes needed to run their businesses. We are developing our new solution to give our financial institution partners an efficient, transparent way for payments to be made across the world.”
Visa’s initial timeline included a pilot launch in 2017, but the company had to navigate a more complicated route than initially envisaged. The company replaced Chain as its partner on the project, electing instead to go with fintech firm FIS, e-payment operator Bottomline Technologies and IBM.
Starting in 2017, the company began to announce job vacancies for crypto and blockchain experts to work on a new payment gateway. In March 2019, the company also published another job listing for specialists in crypto payment solutions.
Three years on, Visa has finally gone ahead with the launch of its payment service, which promises near-real-time settlement for B2B transactions. In a blog post published by Visa on June 11, the company described its platform as the answer to the issues plaguing cross-border transactions for businesses.
An excerpt from the company’s statement reads:
“Visa B2B Connect takes a different approach, turning weeks into one to two days. The non-card-based platform — the first of its kind — removes friction from the process by expediting transactions directly from the origin bank to the beneficiary bank — no intermediaries necessary.”
Simplifying interbank transactions for businesses
According to the company, the newly developed system aims to simplify the process of business payments around the world, eliminating the convoluted transaction flow process involved in interbank settlements for commercial payments.
Kevin Phalen, head of Visa’s Global Business Solutions, hailed the project as one capable of establishing a new paradigm for international business payments. “With Visa B2B Connect, we are making commercial payments quicker and simpler, while enhancing transparency and consistency of data,” Phalen declared.