Visa taps five Philippines banks for B2B blockchain payments

Posted: 15 February 2018 3:33 pm
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The initial client base for the rural banks’ use of the system will be small to medium enterprise partners.

The Union Bank of the Philippines (UnionBank), together with four unnamed rural banks, will employ Visa’s blockchain-based payment platform in order to more efficiently process cross-border transactions.

UnionBank senior executive vice president and chief technology and operations officer Henry Rhoel Aguda said that the system would help the smaller banks “elevate their capabilities”, the Philippine News Agency reported.

“We’re co-creating the blockchain platform to be used by the rural banks,” Aguda said.

Visa selected UnionBank as the first Philippines bank to implement its innovative business-to-business platform. B2B Connect provides financial institutions a secure, fast and predictable way to process international corporate payments. Visa plans to commercially launch the blockchain program in mid-2018.

The initial client base for the rural banks’ use of the system will be small to medium enterprise partners.

“These are the recipients of the payments so there is a connect to know them,” Aguda said.

“We’re not able to reach them much before but now, with data analytics we’re starting to understand more their behavior. We’re able to identify the flows that go into them and all of that stuff.”

Visa also signed United States’ Commerce Bank, South Korea’s Shinhan Bank, Russia’s Sberbank and Singapore’s United Overseas Bank to pilot the platform.

While UnionBank and Visa are currently focused on enhancing B2B payments for the four rural Filipino banks, Aguda said that the goal is to grow and expand the number of financial institutions signed up to participate.

“We want to grow from four right now to as many as we can support,” he said.

Blockchain, the technology behind bitcoin, is a revolutionary distributed-ledger technology that offers a secure and immediate way of transferring a range of data – more specifically, in this case, currency transactions.

Blockchain developments have been cropping up across the globe over the last few months, following an overwhelming explosion of interest in cryptocurrencies and the technology that powers them.

This week, the central bank for the Kingdom of Saudi Arabia joined forced with U.S. crypto company Ripple to allow domestic banks to utilize the platform’s enterprise software solution to settle cross-border payments.

Western Union is also testing transactions with Ripple. China’s LianLian Pay employs Ripple’s xCurrent solution to process same-day cross-border transactions. UAE Exchange, a leading United Arab Emirates (UAE) global money transfers company, is another business that has adopted Ripple’s blockchain network.

Leading technology company Microsoft has been researching and developing ways to utilize blockchain and other types of distributed ledgers to create innovative and secure decentralized digital identities.

Singapore Airlines’ KrisFlyer frequent flyer programme will assist customers to trade their earned rewards for point-of-sale retail transactions through a new digital wallet app, created using blockchain technology.

American multinational courier delivery service FedEx revealed plans to integrate blockchain technology, joining the Blockchain in Transport Alliance (BiTA) to develop industry standards for transportation companies.

In October last year, tech giant IBM joined forced with blockchain startup Stellar Lumens and payments company KlickEx Group to enable high-speed cross-border payments for banks and other financial institutions.

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