Banking News

VISA partners with IBM for B2B Connect blockchain payments

VISA

Since 2016, Visa has been working on its distributed ledger platform for business payments called Visa B2B Connect. It plans to launch the system next year. Visa has just announced a new partnership with IBM to integrate Hyperledger Fabric. The card company has been working on the project with blockchain firm Chain.com which was recently acquired by Interstellar, a for-profit business set up to promote Stellar. In turn, Stellar has a relationship with IBM.

Visa was also an investor in Chain prior to its sale. Neither Chain nor Interstellar was mentioned in the announcement. A Visa spokesperson responded to Ledger Insight’s inquiries about Chain’s continued involvement: “We are no longer using Chain’s technology. As part of the B2B Connect platform, Visa is integrating open source Hyperledger Fabric framework from Linux Foundation with Visa’s core assets. This will help provide an improved process to facilitate financial transactions on a scalable, permissioned network.”

The B2B Connect system aims to offer an alternative to the correspondent banking system. Instead, payments are remitted between banks across the Visa network. They envisage using the new system for payments in verticals such as supply chain, trade, and institutional banking.

B2B connect creates a digital identity token for organizations that includes banking information.

“B2B Connect’s digital identity greatly reduces the opportunity for fraud that might otherwise exist with checks, ACH and wire transfers today, while also helping companies remain compliant as part of the regulated financial ecosystem,” said Kevin Phalen, global head, Visa Business Solutions.

IBM relationship

Visa and IBM have been working together for 40 years. VISA envisions both companies enabling their mutual financial institutional clients to leverage the network. IBM provides hosting to 92% of the world’s top 100 banks and is involved in $7.7 trillion in annual credit card payments.

Last year the companies announced a partnership for Internet of Things ( IoT) payments. They share a vision for embedded payments such as a car automatically paying for gas.

“When industry leaders in payments and in financial services technology work together using open source technology, the entire business landscape stands to benefit,” said Jason Kelley, general manager, IBM Blockchain Services.

Additionally, Visa announced that Bottomline Technologies plans to integrate the B2B Connect platform with its own. The NASDAQ listed company provides a business payment service and has relationships with 1,200 financial institutions.

Last month Visa announced a Thai bank is piloting the system. There are a number of new blockchain payment networks being formed. Ripple is one player, another is JP Morgan with it’s Interbank Information Network.

The article was updated with the confirmation that VISA is no longer using Chain’s technology.