Visa has released a B2B Connect network, their enterprise payment solution to process international payments for corporations. Experts see this as a push from Visa to move beyond retail payment processing and enter the global corporate payment remittance market, as reported by Reuters on June 11, 2019.
Cross Border B2B Payments
The launch of the B2B remittance network powered by a distributed ledger is a sign of Visa’s ability to remain competitive with the rapid adoption of innovative technology. With nearly 30 trade corridors set up across the globe, capacity is expected to expand to 90 markets by the end of 2019.
Visa’s blockchain facilitates direct bank to bank transactions and eliminates the friction of countless intermediaries who typically exist in the international remittance market. Their B2B product is a permissioned ledger that can be accessed only by those who receive approval from Visa. This removes the slightest doubt that Visa may be looking to leverage the synergistic power of decentralization.
B2B Connect utilizes specific properties of a distributed ledger, but it isn’t a distributed ledger itself. Visa worked with the likes of IBM and Chain to build the network but ultimately used Hyperledger Fabric instead.
The network has been running as a test pilot for the last few years and was finally released after the product was deemed functionally capable in real-world scenarios.
The network will ultimately simplify cross border payments for a global industry, a vital pain point that devours money and time.
International payments are often routed through several intermediaries who end up taking their cut and piling on fees, ultimately borne by the end users of the banks.
Other than the monetary inefficiency, it can take days, sometimes weeks, for a transaction to reflect in a receiver’s account. This system has been recognized as flawed and inefficient, but the stubborn nature of bankers and governments meant that nothing would be done as long as the banks profit and help the economy grow.
Although Visa is indeed a household intermediary in the payment’s world, it is less guilty than other contenders considering the speed and efficiency of their card-based networks.