Interest in the technology behind bitcoin is peaking among card issuers and merchants, and Visa plans to test a blockchain powered service for B-to-B transactions in 2017.
The system, called Visa B2B Connect, will enable near real-time transactions of high-value, international payments between participating banks, on behalf of their corporate clients. The payments giant is developing the platform with San Francisco startup Chain’s enterprise blockchain infrastructure, Chain Core, which facilitates financial transactions on scalable, private blockchain networks.
The move comes as financial institutions and other payment companies develop use cases for blockchain, which has the potential to improve payment speed and security.
“The time has never been better for the global business community to take advantage of new payment technologies and improve some of the most fundamental processes needed to run their businesses,” Jim McCarthy, executive vice president of innovation and strategic partnerships at Visa, said in an Oct. 21 news release. “We are developing our new solution to give our financial institution partners an efficient, transparent way for payments to be made across the world.”
Neither company gave an exact launch date for the trial, but they said Visa “plans to pilot in 2017,” in the release.
Most financial services companies now are researching and experimenting with blockchain technology for its potential to reduce costs, improve delivery time and provide transparency to the transaction process for senders and receivers. Chain has claimed it can finalize high volumes of transactions in less than one second.
Visa was one of nine financial services partners that helped in the 18-month building and development process Chain’s Open Standard 1, a blockchain protocol that allows organizations to securely and swiftly move distributed data (like a financial asset), by experimenting, giving feedback to Chain and helping set standards for its ideal blockchain solution. It had already been using the technology in the wild when OS1 was made available to the broader financial services industry in May.
Chain has raised $45 million in venture capital funding to date. Visa participated in the $30 million round that closed in September 2015, along with Citi Ventures, Nasdaq, Capital One and Fiserv.