Visa looks to speed up cross-border payments with new network launch
Visa Inc has launched a new network to help financial institutions process cross-border payments globally on behalf of corporate clients faster and at a lower operational cost, it said on Tuesday.
The Visa B2B Connect network launch covers 30 trade corridors globally and is expected to expand to 90 markets by year-end, Visa said.
The network seeks to simplify international payments by enabling transactions by businesses directly from their bank to the beneficiary bank, Visa said.
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.
The move is part of Visa’s push to expand its reach beyond credit card payments, where it is one of the dominant players worldwide.
“By creating a solution that facilitates direct, bank to bank transactions, we are eliminating friction associated with key industry pain points,” Kevin Phalen, SVP, global head of Visa Business Solutions, said in a statement.
The new network contains elements of distributed ledger technology, the software which first emerged as the system powering cryptocurrencies, Visa said.
While the network is not a distributed ledger itself, some aspects of the nascent technology were used because it can help transfer more information on a payment than existing systems, Phalen said in an interview.
Visa was initially working with
blockchain startup Chain to build the new platform, but ultimately opted to use aspects of of Hyperledger Fabric, the open source distributed ledger developed by a group led by the Linux Foundation.
The network was built in partnership with Bottomline, FIS and IBM, Visa said. (Reporting by Anna Irrera Editing by Sonya Hepinstall).