Today enterprise blockchain firm R3 announced a partnership with Singapore startup OneHypernet. The new company is creating a netting solution for cross border payments which aims to significantly reduce the number of payments a company needs to make, saving payment costs – it claims by 96% – and shortening times.
There’s a need for netting solutions for blockchain-based payments. Blockchain can enable instant settlement, but this can sometimes mean that more cash is required at one point in time. Consider two banks that make payments to each other bilaterally. If they settle every transaction as it becomes due, that will mean there are several payments in both directions. In contrast, if they agree to settle a net amount once a day, the final payment amount might be a fraction of the total payments.
In the case of OneHypernet, it’s not thinking about bilateral netting. It’s planning to net payments across numerous participating banks.
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