Visa has launched a blockchain-based platform for cross-border payments between financial institutions. This sees it enter the increasingly crowded marketplace that Ripple has been trying to carve for itself.
Visa’s Blockchain-Based B2B Connect
Payment processing giant, Visa, launched a business-to-business platform to enhance the efficiency of cross-border transactions for smaller financial institutions. Traditionally, smaller institutions have had to rely on the services of larger intermediary banks, causing potential delays and high fees.
Visa B2B Connect, as it is called, is built on the Hyperledger Fabric blockchain software from IBM and Linux. The company developed a blockchain-based solution to increase transparency and traceability, although obviously, the platform is not decentralized.
B2B Connect facilitates direct bank connections, with payment fees indicated up front. It currently has 30 payment corridors but plans to increase this to 90 by the end of the year.
Visa says that B2B Connect transactions will settle quicker, in one to two days.
Not So SWIFT After All
Perhaps someone should have a word with Visa about those speed estimates. Whilst one to two days may be quicker than the original SWIFT system, this has already been superseded by GPI. SWIFT introduced the Global Payments Initiative back in 2017, which processes the majority of payments within 24 hours.
Even SWIFT is looking to further improve GPI with blockchain technology, announcing a partnership with Ripple competitor R3 back in January.
Uh-oh… Somebody Said Ripple
Of course, Ripple (and its fanatical army of supporters) should be feeling very pleased with itself. After all, imitation is the sincerest form of flattery. And it has been finding itself flattered rather a lot of late.
First came previously blockchain-phobic JPMorgan’s JPMCoin, although that seems to be purely an internal platform. More recently, we saw a consortium of international banks come together to announce the curiously named Fnality platform.
And now, Visa rears its ugly head.
With its real-time global transaction platform, Ripple has likely little to fear from these newcomers in its market space in terms of speed. And SWIFT’s almost unbelievably high 6% failure rate has long been one of Ripple’s key marketing strategies.
Visa’s brand and reach could be a deciding factor. Although, based on past experience, Visa may make the process more efficient, though its greed is unlikely to pass on any (or much) cost benefit to users.
Will increasing competition from major banks threated platforms like Ripple? Add your thoughts below!
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