Three years after making its first public announcement in October 2016, the Visa B2B Connect network is being made available in 30 markets, with plans to expand to as many as 90 territories by the end of 2019.
Visa announced the news following the Fintech Festival in Singapore, in its "efforts to transform the business-to-business (B2B) payments space."
Visa's B2B Connect is the company's payment system created to help financial institutions and clients to circumvent existing banking networks, and process easier cross-border payments by leveraging the blockchain technology.
According to Kevin Phalen, SVP, global head of Visa Business Solutions:
"By creating a solution that facilitates direct, bank to bank transactions, we are eliminating friction associated with key industry pain points. With Visa B2B Connect, we are making payments quicker and simpler, while enhancing transparency and consistency of data."
To make this possible, Visa partners with innovators from Commerce Bank in the United States, Shinhan Bank in South Korea, Union Bank of Philippines and United Overseas Bank in Singapore.
"We are beginning to process bank to-bank test transactions with a few of these partners, with others to follow soon, as we gear up for the commercial launch of Visa B2B Connect," explained Visa.
As one of the major provider of commercial card payment solution, Visa sees expanding opportunities in high-value cross-border payments.
According to the company, it's "an area that’s ripe for improvement and innovation."
Since cross-border payments can be cumbersome, lengthy and friction-filled for financial institutions and its corporate clients, Visa' blockchain solution wants to simplify the process by sending transactions over Visa’s network from the bank of origin directly to the recipient bank.
"The network's unique digital identity feature tokenises an organisation's sensitive business information, such as banking details and account numbers, giving them a unique identifier that can be used to facilitate transactions on the network," explained Visa.
Although the system uses blockchain, the network isn't actually a blockchain.
Visa B2B Connect only uses some elements of the technology that allow network participants to transfer more information on a payment than existing alternatives.
And unlike cryptocurrency-based blockchains that power Bitcoin and Ethereum, Visa’s product isn’t decentralized, since the payments giant has complete control over it.
Initially Visa partnered with startup Chain to create the B2B Connect platform, but eventually decided to use elements of Hyperledger Fabric, the Linux Foundation’s open source distributed ledger. Visa also got some helping hands from IBM, FIS, and Bottomline.
By using IBM Blockchain for Visa B2B Connect, the company touted the use of blockchain will provide "improved process to facilitate financial transactions on a scalable, permissioned network".
IBM as one of Visa's partner has been active in the distributed ledger space, with two of the most recent, having helped creating Europe's first fully functional food blockchain with French retailer Carrefour, and putting shrimps to the blockchain.
"With Visa B2B Connect, we are leveraging Visa's existing assets and our expertise in cybersecurity, data privacy, the scale of our network - and layering that with new elements of distributed-ledger technology to meet unique needs of this industry," said SVP of data product development at Visa Sam Hamilton.