On June 11th, Visa launched a new commercial network that simplifies global payments and eases international transactions. Previously, Visa Inc was known for only credit card payments, but now with this new network, traders across the globe will be able to transfer money from local banks to clients’ accounts directly.
According to Visa Inc, their network will not only simplify the money transfer processes in cross-borders but will also make it faster when traders transfer money directly unlike before where an intermediary bank had to be involved.
Founding the B2B
In the building of the bank to bank network, they (Visa Inc.) decided to use the Hyperledger Fabric by the Linux Foundation over working with a crypto startup firm. Also, to create the network Visa partnered with prominent fintech companies such as Bottomline, IBM, and FIS to make this venture successful.
Perks of the Visa Cross Border System
The birth of this new network is set to bring an end to an era where sending money across boundaries was somewhat cumbersome after a business deal. Initially, traders used channels that not only took long but were also very expensive. Visa’s bank to bank transaction simplifies the entire system and cuts the costs of the same. Kevin Phalen, the global head of Visa’s Business Solutions, had this to say:
“By creating a solution that facilitates direct, bank to bank transactions, we are eliminating friction associated with key industry pain points.”
According to Phalen, the commercial B2B system is comprised of complex software that contains elements with a nascent technology. The nascent tech in the cross-border system is based on distributed ledger software that was previously used in crypto.
Phalen (in an interview) continued to elaborate that the reason Visa Inc used the technology is that the system helps in the transfer of information of payment unlike other cryptocurrency tools in the market.
“We are making payments quicker and simpler while enhancing transparency and consistency of data,” Kevin said.
Visa Adapting to the Cryptocurrency Market
In October last year, Al Kelly, the CEO of Visa, gave his opinion on the rise of crypto innovations in an interview hosted at Mad Money by Jim Cramer. Kelly reiterated that the growth of blockchain and cryptocurrencies does not pose any threat to their company. He went on and stated that Visa would not be part of cryptocurrency businesses, at least not until the crypto market is stable and well-established as a reliable payment instrument.
Well, it seems fair enough that with this news, Visa has finally considered cryptocurrency technology viable in the money transfer businesses. This newly launched network is projected to operate in a unique manner whereby an organization will have a unique identification that will be used to facilitate transactions.