Visa Inc., the global payment operator, launches Visa B2B Connect network. It will allow corporate clients to transfer funds directly through blockchain. Currently, the new technology is available to companies from 30 countries, but by the end of the year another 60 regions will be connected to it. This can seriously change the balance of power in the financial market.
Currently, almost every company uses bank payments to conduct settlements with counterparties. The correspondent accounts technology has proven its reliability; however, it has serious drawbacks in regards to international trade. When several credit organizations are present in the settlement chain, unexpected delays and even technical failures occur.
Due to the information permanence on blockchain, it is possible to make instant payments with minimal risk. There is no need for additional monitoring and transactions confirmation.
The use of blockchain during funds transfer allows Visa B2B Connect to conduct instant real-time transactions. Moreover, it does not matter where the buyer and seller are located, or which bank supports their current accounts. Payment is made at much lower transaction costs.
Originally, Visa B2B Connect project was developed together with Chain, the blockchain startup, in which VISA had invested $ 30 million. However, it was then decided to change the concept somewhat and to switch to Hyperledger Fabric solution by Linux Foundation. It is emphasized that blockchain is used as part of combined code. In other words, it is used only on a few, the most critical areas.
Hyperledger Fabric, an open project, is being developed by Linux Foundation together with other giants of IT industry. IBM is one of the most famous contributors.
The uniqueness of Visa solution is the use of distributed account ledger. It was the source of information processing based on cryptocurrency.
Visa Inc., the payment operator, is one of the dominant players on the international transaction market. At the time of cryptocurrency emergence, the company was skeptical about new technologies, considering them imperfect. However, blockchain development has changed the situation.
Visa B2B Connect began to be developed back in 2017. Then Chain startup was involved in the collaboration.
As of today, blockchain-based payment system can already successfully compete with traditional transaction methods. Solutions by Ripple and other major market players cast some doubt on the position of previous leaders. So, the creation of B2B Connect is a forced step for VISA in many respects. If the company does not realize the potential of new technologies, it can lose the competitive battle.