Visa, the world’s second-largest payment processor, is launching a cross-border payment system called ‘B2B Connect’ on a distributed ledger system.
The network will boast a unique token-based system of ownership for sensitive information intended to be used for financial transfers between businesses.
After watching the blockchain space closely, Visa is finally diving into the industry head-first with its latest announcement. The multinational payment processing giant has just unveiled its new product called ‘B2B Connect.’ The distributed ledger platform will provide ‘digital identity for clients,’ and also provide corporations and institutions with a ‘simple, fast, and secure way’ to process cross-border payments.
Visa claims that by relying on blockchain technology, it can easily stamp out fraud that might otherwise take place when using checks, ACH, or wire transfers.
Traditionally offering payment processing for cards, this is Visa’s first commercial foray into business-to-business payments. The B2B Connect platform is slated to launch commercially next year. In the meantime, Visa is building many other high-profile partnerships.
Visa Partners With Major Tech Players
In preparation of B2B Connect’s commercial launch, Visa will rely on various partners in the space. For example, Bottomline Technologies is providing the necessary technological infrastructure. Currently, the tech company services around 1,200 financial institutions globally.
Visa is also working closely with IBM Blockchain Service, as per its press release. Coupled with the open-source Hyperledger Fabric framework from the Linux Foundation, Visa is looking to leverage both IBM and Hyperledger for its B2B Connect platform.
“B2B Connect is one of the most powerful examples to date of how blockchain is transforming payments,” Jason Kelley, general manager of IBM Blockchain Services, told reporters.
B2B Connect for Corporations and Beyond
B2B Connect is intended to be used only by large businesses and financial institutions, as of now. Ultimately, Visa is looking to expand this service to the entire globe upon commercial launch.
The promise of B2B Connect is that it ultimately eliminates any intermediaries in international money transfers. Generally, the costs of these intermediaries tend to be very high and B2B Connect promises to cut fees.
This might come as a shock to other cryptocurrency-related projects such as Ripple’s xRapid, which was planning on pursuing a similar payment network. However, it seems that Visa has used its weight to beat its competitors to the punch.
With the announcement of B2B Connect, it seems clear that Visa is paying close attention to emerging trends in blockchain technology. We can expect to hear about more companies onboarding the new technology as its commercial release date comes closer next year.
Do you believe Visa’s new platform will become the dominant cross-border payment system for corporations? Can other projects still compete with their own alternatives? Let us know your thoughts in the comments below.