UnionBank Will Use Visa’s Blockchain-Based Payment System
The Philippines News Agency has reported that five of the country’s banks will be teaming up to use Visa’s blockchain-based payment system. According to the local news agency, the Union Bank of the Philippines (UnionBank) will help four other rural banks in utilizing Visa’s business-to-business (B2B) Connect system. The banks, which have not been named, intend to make their payment processes more efficient by using this new payments technology. Although this type of payments infrastructure has been tested out in other countries, the publicly-listed UnionBank happens to be the first bank in the Philippines to use B2B Connect.
Henry Rhoel R. Aguda, Senior Executive Vice President at UnionBank, stated, “We’re co-creating the blockchain platform to be used by the rural banks”. He also added that the long-term goal is to offer similar support to as many banks as possible. Notably, Visa’s blockchain-based payment system is already being tested by the United Overseas Bank of Singapore, Commerce Bank in the United States, Sberbank in Russia, and the Shinhan Bank of South Korea. These pilot programs seem to be part of a larger effort by Visa, which is planning to commercially launch this proprietary payments system sometime this year.
UnionBank CEO Wants To Focus On SMEs
Edwin Riego Bautista, President and CEO of UnionBank, mentioned earlier that his institution was focusing on helping small and medium enterprises (SME) to adopt this new payments technology. These SMEs have already been working as partners with the bank’s corporate clients.
Mr. Bautista also stated that “These are the recipients of the payments so there is a connect to know them”. He then pointed out that his bank had not been able to serve them before. However, he says that his bank is now in a much better position as far as understanding their behavior, which it does by using data analytics.
Visa & Chain Core Partnered To Create B2B Connect
Back in November 2017, Visa first introduced a trial version of this B2B blockchain payments platform by partnering with startup Chain Core. The startup aims to assist organizations in leveraging enterprise-level blockchain infrastructure. Its partnership with Visa was announced in a detailed press release published in October, 2016.
According to Visa, its B2B Connect payment system will improve the payments process between banks and their corporate clients. The global payments technology company plans to accomplish this by making transactions more transparent and predictable. Per Visa, this can be achieved by offering “near real-time notification and finality of payment” to banks and their corporate clients. Additionally, the giant payments processor says transactions with B2B Connect will be more secure and trusted. That’s because all transactions are to be executed on an immutable distributed ledger (blockchain) and the identities of all network participants are known, on what the payments company says is “a permissioned private blockchain architecture that is operated by Visa”.
As most crypto enthusiasts would know, organizations around the world have taken a keen interest in blockchain technology. Clearly, it has the potential to be used in many different industries. Not only can it help businesses operate more productively, but also much more cost-effectively. With established financial companies like Visa exploring blockchain’s use cases, it will further add to its legitimacy.