Last week, the Managing Director of the UPS Strategic Enterprise Fund Rimas Kapeskas published a blog post on Longitudes, the official UPS blog, that really got the logistics industry talking.
Kapeskas asked, “Does Global Trade Need A Global Currency?” And it started a conversation about the potential for bitcoin and blockchain technology to ease friction for the logistics and payments players that make cross-border trade possible.
It was a provocative piece that led PYMNTS to speak further about the idea with Kapeskas. Read what he told us about his vision for the future of the cryptocurrency in cross-border and B2B trade, and how logistics giant UPS could step in to lead the charge.
PYMNTS: In your recent blog post, you discuss consumers’ continuing use of inefficient payment methods when it comes to cross-border trade and eCommerce. But many of the statements you make in your post can also be applied to B2B commerce – some argue that businesses similarly use inefficient and slow methods to pay overseas suppliers. How would you respond to that claim?
RK: Absolutely. The problems are the same in the B2B space, particularly for small business. Blockchain technology has many potential benefits to offer B2B transactions, including “smart contracts” and cross-border payroll processing.
The market is beginning to wonder whether the bitcoin hype was overstated, and instead many have turned to the blockchain – the underlying technology of bitcoin – to consider possible mainstream applications for B2B payments. How do you envision the potential widespread impact of the blockchain on international payments between businesses, if at all?
RK: The blockchain technology is impressive, as it could foster a level of security we’re just beginning to understand. This is particularly interesting in the world of international transactions, where there is now less transparency and a higher potential for fraud. The blockchain technology could bring badly needed visibility to the system, especially in regards to identity management and authentication. Businesses will also begin to incorporate private blockchains into their business processes.
You mention the success of mobile payments with M-Pesa, which provides mobile banking services in various African nations. Safaricom recently announced that it is opening its M-Pesa API to allow businesses to pay each other through the service. How might businesses benefit from a mobile B2B payments solution? Do you see mobile B2B payments as having any potential even for large corporations?
RK: When we talk about mobile today, a lot of people are just thinking about cellphones being involved in the payment process. Really, cellphones are portable computers – the form is just changing. We’re seeing an evolution of the payment process where our phones become our digital wallets. Even in a B2B space, there’s going to be a need for the facilitation of these transactions. I see a lot of potential, particularly in the area of micropayments.
As a logistics company, UPS holds the responsibility of making sure that goods get from point A to point B, and of course this includes border crossings. How might UPS itself – and all B2B logistics firms – benefit from being able to accept a global currency like bitcoin?
RK: Some of the world’s major companies are starting to understand that the blockchain technology can be used for numerous types of international transactions, including paying vendors and payroll processing. UPS is always looking for ways to streamline the movement of goods, funds and information. Digital currency could eliminate many of the friction points that exist today, allowing more businesses to participate in global trade.