Visa Enters The $125 Trillion Global Money Transfer Market With New Blockchain Product

Visa Enters The $125 Trillion Global Money Transfer Market With New Blockchain Product

Visa seems to do everything on a massive scale. Last year, it moved $11.2 trillion over its payment rails across more than 200 countries for purchases ranging from cups of coffee to cars. Now it’s eyeing an even bigger market: cross-border, business-to-business (B2B) transactions, where banks transfer money on behalf of corporate customers. Visa says it’s entering a $125 trillion market and using distributed ledger technology—software where transactions must be confirmed by multiple computers on a network to be considered final—to make these payments faster, cheaper and more transparent.

Most cross-border payments are done through the Society for Worldwide Interbank Financial Telecommunication, or Swift, a Belgian organization started in 1973 that counts 11,000 financial institutions as members. But its legacy system has inefficiencies. Because few banks are connected directly to each other, a payment that originates in Kansas City and is bound for Nairobi might have to stop at banks in New York and London before reaching its final destination, with each bank extracting a fee. It’s also difficult to track the transfer’s progress and predict how much it will cost, including what foreign exchange rate you’ll get.

In 2017, Swift launched a new service, gpi, to speed transactions and transparency. With this product, nearly all transactions settle within 24 hours, says Harry Newman, head of banking at Swift. So far, 3,500 banks have signed up, and they move $300 billion a day over the service, roughly half of Swift’s total daily volume.

Visa is also making transactions faster and more transparent with its newly launched B2B Connect product, says Kevin Phalen, Visa’s global head of business solutions. Its newly launched distributed ledger software facilitates direct bank connections. Financial institutions can also see payment fees upfront. Transactions settle quicker, in one to two days. The B2B Connect rails are new, so Visa isn’t leveraging the ubiquitous credit card rails it has spent decades building and maintaining. But it is leveraging its vast experience in areas like complex payments, cybersecurity and compliance………Read More>>

Source:- forbes