On October 21 Visa announced in a press release that it is getting ready to launch a blockchain digital ID system to handle cross-border payments in Q1 2019. Visa is working in conjunction with IBM on this project.
The system is called Visa B2B Connect. It is built to secure cross-border payment processes for financial institutions. The blockchain system tokenizes business data – personal information, account numbers, and banking details – giving them a cryptographic identifier which is used to secure transactions made on this platform.
Global Head of Visa Business Solutions, Kevin Phalen, stated that Visa B2B Connect digital ID system will help reduce any risks of fraud with wire transfers, ACH and problems with all sorts of other checks that otherwise may still exist today. Of course, the system will offer these features complying with all necessary financial regulations.
B2B Connect will integrate Visa core assets with Hyperledger Fabric framework hosted by Linux Foundation and developed with IBM’s help. According to the press release, it will create a scalable network for the financial industry.
Jason Kelley from IBM Blockchain Services said that he sees this system as a powerful example of how the blockchain technology is changing payment systems and financial sector in general.
B2B Connect partnerships
FinTech company Bottomline Technologies is also joining Visa’s B2B Connect digital ID system. It is quite a big deal because Bottomline Technologies is currently serving over 1200 institutions in the financial industry.
Last month there was a report that one of Thailand’s top 5 largest banks, Kasikornbank, also joined B2B Connect initiative for cross-border payments.
According to the information on Visa’s official website, first B2B Connect pilot payments where processed in 2017 by partners including United Overseas Bank in Singapore, Union Bank of Philippines, US Commerce Bank, and Shinhan Bank.
It is worth mentioning that even though Visa and MasterCard are embracing the potential of blockchain technology, reportedly they are planning to move ICO and cryptocurrency jurisdictions to a “high risk” category. It means that interactions with both services could become more difficult imposing additional transaction monitoring along with the possibility of chargebacks occurring up to 540 days after the actual transaction date.