Visa and Chain join forces to build blockchain remittance network

Rage Comment : Visa, an international traditional card payment service provider, has started cooperation with Chain, a blockchain technology startup, to build a blockchain cross-border remittance network to challenge the monopoly of the SWIFT settlement network. The system is VisaB2B, which can effectively improve the current efficiency and cost-effectiveness of cross-border remittances. In addition, Visa has also cooperated with more than 30 global banking institutions on blockchain, which will have a significant impact on the original payment network.

Translation: Annie_Xu

Visa and Chain Inc. have jointly developed VisaB2B based on blockchain technology, challenging the dominant position of SWIFT global settlement system in large-value cross-border remittances. As the first complete commercial blockchain product, it stands out from other blockchain projects. However, some technical analysts believe that blockchain technology will not be as perfect as expected.

Bank investment exceeds US$1 billion

Greenwich Associates estimates that banks will invest more than $1 billion in blockchain technology, and the pace of investment is just beginning.

VisaB2B challenges SWIFT's position and impacts its large-scale cross-border remittance business; SWIFT has also been subject to strict regulatory scrutiny due to frequent hacker attacks.

Visa supports medium-sized corporate cash expenditures such as payroll.

By integrating software from blockchain startup Chain, banks can use Visa money transfer corridors to send money to each other without having to alert a third party via a message (like a check).

Blockchain Advantages

Jim McCarthy, executive vice president of innovation and strategic partnerships at Visa, said paper checks and wire transfers are inefficient, slow and expensive.

Cross-border remittances are risky and complex, so companies hope to improve them through blockchain. Chain gives Visa the capital to compete with banking blockchain startups such as R3 and Ripple.

In July, Accenture PLC estimated that cross-border bank payment transactions would reach 10 to 15 billion, with a transaction value of US$25 trillion to US$30 trillion.

Change doesn’t happen overnight

Accenture said the new commercial payments network would not be ready for at least five years, depending on which option is chosen.

Visa has worked with 30 banks in ten countries to develop a B2B Connect prototype. Earlier this year, Visa Europe said it would conduct a separate blockchain network test and connect several European banks to the network.

Chain CEO and co-founder Adam Ludwin said that blockchain needs a carrier, such as Visa; because its network accommodates thousands of banking institutions.

He said that the existing workflow has made the market rigid, and it is not enough to simply upgrade the system, but the system also needs to be applied to the market.