Visa released its blockchain-powered business-to-business payments service, B2B Connect network, which allows financial institutions to process corporate cross-border payment transactions faster and at a low operational cost.
The move is seen as part of Visa’s effort to push beyond card-based transactions and into the high-value cross-border transaction market.
Visa has estimated that cross-border transactions could add about $12.5 trillion to its addressable opportunity.
The company said the B2B Connect network now covers 30 trade corridors globally. It is expected to expand to 90 markets by the end of the year.
In a statement, Kevin Phalen, senior vice president and global head of Visa Business Solutions, said the product release marked an “important industry milestone.”
“By creating a solution that facilitates direct, bank to bank transactions, we are eliminating friction associated with key industry pain points,” Phalen said.
The B2B Connect network is a “permissioned” network, Phalen said, that can be accessed only by parties that receive the proper approvals.
Visa built the network in partnership with Bottomline, FIS, and IBM.
B2B connect uses elements of distributed-ledger technology that powers cryptocurrencies, but it is not a distributed ledger itself. Visa first worked with Chain, a blockchain startup, to build the network. Ultimately it used an open-source distributed ledger, Hyperledger Fabric, developed by a group led by the Linux Foundation.
Visa has been running the B2B Connect network as a pilot program for a few years. The cross-border payment market, considered slow and opaque, is the target of a number of efforts by the industry. The piloting institutions Visa worked with include Commerce Bank and Cornèr Bank.
At a conference last week, Visa CFO Vasant Prabhu said the network had generated a lot of excitement and, “a variety of banks already signed up for it.”
Visa shares are up 29% so far this year. They were down about 1% in early afternoon trading.