Visa has announced the launch of its new Visa B2B Connect payment network, Reuters reported on Tuesday. The network uses elements of blockchain technology to allow financial institutions to rapidly process international corporate client payment transactions at lower cost.
The Visa B2B Connect network is designed to provide a more seamless and efficient system for cross-border transactions, by allowing payments to flow directly from one company’s bank to the recipient’s bank:
It provides an alternative to the correspondent banking network, where an intermediary bank will often be used by smaller banks to make a payment. This can result in slower transactions and more complexity.
Senior vice president and global head of Visa Business Solutions Kevin Phalen said that the new network will eliminate “friction associated with key industry pain points” by enabling direct bank-to-bank transactions. He also noted that the system uses elements of blockchain technology to enable ore information to be transferred with each payment, but the network itself is not a distributed ledger.
Visa had originally been partnering with blockchain firm Chain on development of the network, but eventually decided to rely on aspects of the open-source Hyperledger fabric. The company partnered with IBM, Bottomline, and FIS to develop Visa B2B Connect. Visa expects to expand its trade corridor coverage from an initial 30 markets to 90 markets by the end of 2019.