Heavyweight financial services provider Visa has reportedly set in motion a brand new network which intends to eliminate correspondent banks in cross-border payments. Nicknamed “Visa B2B Connect,” the system includes elements of distributed ledger technology– namely, elements of Hyperledger Fabric.
Elimination of Middlemen in Visa’s Sights
Visa is one of the most well known financial services providers around the world with hundreds of thousands of people using its cards daily for a wide variety of diverse activities. Now, the service provider has supposedly introduced a new network called “Visa B2B Connect” which targets its corporate clients and strives to eliminate the correspondent banks when executing cross-border payments.
According to Reuters, the network aims to easily simplify international payments by permitting businesses to transact directly with one another without needing to use the correspondent banking network. Theoretically, this can bring about speedier transactions and reduce the complexity of these transfers.
More interestingly, however, Visa has taken an approach which highlights the perks of distributed ledger technology. Actually, the company has opted to use facets of Hyperledger Fabric– an open source distributed ledger which was created by the Linux Foundation in an effort to push blockchain adoption further. It was built in partnership with marquee companies, featuring FIS, IBM, and Bottomline, among many others.
Trouble For Ripple? Or Not So Much?
Visa’s raid into cross-border payments has consistently been to some degree intimidating for Ripple, as the latter places a considerable emphasis on this distinct ability of its cryptocurrency.
Back in late 2018, Ripple introduced its xRapid technology, which aims to offer notable decreases in both time and cost for sending international payments. That being said, a company as established as Visa is likely to have higher chances of deploying its network and getting new partners aboard.
Simultaneously, though, Ripple is also a part of the Hyperledger consortium and offers Interledger Protocol (ILP) in Java for enterprise usage. It’s also worth taking note that back in 2018, Visa acquired the British payments firm Earthport for approximately $250 million.
Earthport is a partner of Ripple. Their teamwork aims to incorporate Ripple’s protocol into the existing payment network of Earthport so as to improve international transactions.
During the time of this writing, there is no available information on Visa’s motives and how close the connection with Hyperledger is. Nevertheless, the move most definitely highlights the rewards that distributed ledger technology can introduce. Moreover, it shows that even conventional payment companies are starting to recognize it.
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