Major financial services provider Visa has reportedly launched a new network which aims to eliminate correspondent banks in cross-border payments. Dubbed “Visa B2B Connect,” the system contains elements of distributed ledger technology – namely, elements of Hyperledger Fabric.
Visa Aiming to Eliminate Middlemen
Visa is one of the largest financial services providers in the world with hundreds of thousands of people using its cards daily for a broad range of different activities. Now, the company has reportedly launched a new network called “Visa B2B Connect” which targets its corporate clients and aims to eliminate the correspondent banks when doing cross-border payments.
According to Reuters, the network aims to simplify international payments by allowing businesses to transact directly with each other without having to use the correspondent banking network. Supposedly, this can result in quicker transactions and decrease the complexity of these transfers.
More interestingly, however, Visa has taken an approach which highlights the benefits of distributed ledger technology. In fact, the company has opted to use aspects of Hyperledger Fabric – an open source distributed ledger which was developed by the Linux Foundation in an attempt to push blockchain adoption further. It was built in partnership with marquee companies, including FIS, IBM, and Bottomline, among many others.
Trouble For Ripple? Or Not So Much?
Visa’s foray into cross-border payments has always been somewhat intimidating for Ripple, as the latter places a huge emphasis on this particular capability of its cryptocurrency.
Back in late 2018, Ripple launched its xRapid technology, which aims to provide for significant reductions in both time and cost for sending international payments.
However, a company as established as Visa is likely to have higher chances of deploying its network and getting new partners on board.
At the same time, though, Ripple is also a part of the Hyperledger consortium and provides Interledger Protocol (ILP) in Java for enterprise usage.
It’s also worth noting that back in 2018, Visa bought the British payments firm Earthport for around $250 million. Earthport is a partner of Ripple. Their collaboration aims to integrate Ripple’s protocol into the existing payment network of Earthport in order to improve international transactions.
At the time of this writing, there is no available information on Visa’s intentions and how close the connection with Hyperledger is. However, the move definitely highlights the benefits that distributed ledger technology can introduce. Moreover, it shows that even traditional payment companies are beginning to recognize it.