Visa Partnering and Leading in Blockchain and Digital Identity System Adoption

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If Tech stocks are showing volatility, it’s not the same picture for payment stocks such as the big four: Visa, MasterCard, Paypal and Square. In fact, Visa’s implication in blockchain is noteworthy. Visa will soon launch a new blockchain-based digital identity system and has a partnership with IBM in blockchain.

An official press release published on October 21, 2018 shows how the company aims at providing digital identity solutions for financial institutions. This is really pretty monumental to the future of payments and blockchain adoption. Even as the likes of Ant Financial is expected to become a blockchain leader in the space, Visa is no newcomer to blockchain patents.

With PayPal having an incredible 2018, and Ripple XRP seemingly making good progress, Visa’s announcement relates to a one-of-a-kind distributed ledger-based platform designed to give financial institutions a simple, fast and secure way to process cross-border business-to-business payments globally.

Mastercard itself seeks a crypto-backed “Fractional Reserves,” that some analysts believe aims to undermine decentralization. Visa CEO Al Kelly meanwhile is bullish on Visa B2B Connect and how digital assets may be necessary.

“With B2B Connect, we’re developing a new way for businesses to make cross border, high value payments — fixing broken processes and breaking down geographic barriers along the way,” said Kevin Phalen, Global Head, Visa Business Solutions, Visa.

  • Visa has developed what amounts to a Blockchain-Based Identity System.
  • Visa and Mastercard have to pivot into crypto-asset decentralization to consolidate their position against the rise of digital assets and public blockchains. 
  • Publicly Visa is saying that crypto needs to “move from being a commodity to really being a payment instrument” before it can become a real competitor to the conventional financial system. However, their patents and innovations point to a more aggressive approach.

Visa B2B Connect is actually a VISA and IBM collaboration on a massive scale. The system reportedly tokenizes sensitive business data — such as banking details and account numbers — granting them a unique cryptographic identifier that will be used for transactions on the platform. Centralized blockchain-based digital identity systems were inevitable, but it appears to be coming soon.

B2B Connect Might Change the Future of Digital Identity Systems

  • The solution integrates a Hyperledger Fabric framework hosted via the Linux Foundation and which was developed with input from IBM.
  • It’s thought fraud reduction will be one of the major results of the new system..
  • Bottomline Technologies will also help Visa in taking the project to a broader audience with its 1,200 clients.

B2B Connect is an important strategic initiative for Visa and shows how central blockchain might be in its global play where B2B Connect itself was first previewed back in 2017, and even last year counted U.S.Commerce Bank, South Korea’s Shinhan Bank, the Union Bank of Philippines, and the United Overseas Bank in Singapore as among the first partners processing pilot payments ahead of commercial launch.

IBM and Visa are highly implicated in the B2B centralized future of blockchain. Importantly in FinTech, blockchain adoption isn’t just occurring in the Cloud but in the payments sector. No matter what happens with the economy and stocks, payment companies such as Visa, Mastercard, PayPal and Square (among others) at the intersection of technology and payments have a bright future. This is because people always need to move assets, liquidity and across borders.

IBM and Visa will be maximizing clients’ benefits with the classical advantages of blockchain including the removal of friction, time spent and fraud specifically with regards to cross-border corporate transactions. The official launch of B2B Connection is a huge milestone in the mainstream adoption of blockchain meets finance.

With security, interoperability and governance at the core of every B2B Connect transaction, this builds on a stellar 40-year collaboration between Visa and IBM.

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