We’ve commented on cross-border developments in the B2B space before and expect ongoing developments. This latest collaboration features JPMorgan and Visa, who have separate blockchain networks for cross-border payments and will now integrate the two.
The Visa B2B Connect network has been live for about three years and reaches dozens of global markets. It has a blockchain foundation and facilitates settlement in fiat currency. JPMorgan’s Liink is part of its Onyx initiative and is also a blockchain-based network designed for wholesale cross-border payments. One of its main assets is Confirm, to which Visa Connect has completed integration work, and it validates account information prior to payment initiation. Bringing together the two will expand market access for participating banks. The release indicates that Confirm can verify 2 billion accounts at 3,500 banks.
There is speculation as to whether the new partnership will have an impact on SWIFT, and we would expect that it will eventually be a viable alternative. It would seem obvious, however, that establishing modern networks for B2B cross-border transactions is something that is in demand.
Meanwhile, Ravi Menon, Managing Director of the Monetary Authority of Singapore, gave a keynote speech where he mentioned that the current state of cross-border payments is “slow, costly, opaque, and inefficient, relying on an archaic network of correspondent banks.”
He believes the development of “private sector blockchain-based payment networks” could be the solution to resolve this problem.
The partnership between Visa and JPMorgan could be a strategic one that will prove beneficial in the ongoing efforts to effectively manage and facilitate cross-border payments.
Overview by Steve Murphy, Director, Commercial and Enterprise Payments Advisory Service at Mercator Advisory Group.
