B2B Payments

IBM, SWIFT Cap X-Border Payments Initiatives       

Blockchain and beyond, cross border payments held the focus of IBM, and others this past week.  SWIFT grabbed some headlines too — and not simply due to the controversy that still swirls around a separate, Europe-focused payment system

Blockchain — or rather, blockchain-focused projects — has been in the spotlight as China has been trialing financial services (FinServ) and security measures across those rails. However, blockchain is also gaining ground, and currency is offering a boost to the payments infrastructure.

To that end, IBM said it launched its Blockchain World Wire, billed as a cross-border payment system that is powered by the Stellar blockchain network. The tech giant also said that the blockchain-enabled conduit is more cost-efficient than seen with traditional payment methods, and can support any number of asset types, across destinations and sizes. The process integrates the World Wire API into banks’ payment systems.

The company said that the Blockchain World Wire can simultaneously clear and settle cross-border payments in near real time. By way of illustration, the company gave a scenario:

“Two financial institutions transacting together agree to use a stable coin, central bank digital currency or other digital assets as the bridge asset between any two fiat currencies. The digital asset facilitates the trade, and supplies important settlement instructions. … It all means funds can now be transferred at a fraction of the cost and time of traditional correspondent banking.”

IBM will be demoing the new project this October.

Africa As Greenfield Payments Opportunity

Beyond company-specific projects spotlighted in these digital pages, Africa as a whole presents a number of greenfield opportunities for payment infrastructure initiatives. In one example, Stripe and Visa, and a host of other firms, invested $8 million in Paystack. That company brings APIs to help create payment infrastructures and connect payment processors — and the firm already processes 15 percent of online payments in Nigeria. This comes against a backdrop where businesses can wait weeks to get hooked up to take online payments.

In addition, as reported in African payments-related news, Jack Ma, the founder and chairman of Alibaba Group Holding, said his firm will do “anything to share technology” with Africa. Ma is contributing $10 million to a fund that will be geared toward African entrepreneurs.

SWIFT, Too

One might be forgiven for thinking that the news surrounding secure messaging provider SWIFT has been limited to speculation and headlines concerning the possibility of a parallel, Europe-focused, cross-border payment scheme. However, SWIFT also made headlines when it said late last week that Ebury has become the first FinTech firm to go live across the SWIFT global payments innovation (gpi).

SWIFT noted in an announcement that the gpi payments are marked by speed — credited within 30 minutes, generally speaking, though it is noted that many transactions are credited in seconds. Almost all transactions, said the firm, are done within 24 hours. Thus, FinTech firms such as Ebury are able to track international payments in real time, and globally. The gpi is slated to be the standard across all cross-border payments by the end of 2020, said SWIFT last week.

In a statement tied to the launch via Mark Hewlett, wholesale banking relationship director at the FinTech, “We have been excited about gpi since the beginning, and immediately recognized how it could help improve our value proposition to businesses trading internationally, in particular our NGO and SME customers. It has the additional benefit of improving our own operations; with gpi, our payment confirmations to beneficiaries are showing within minutes, sometimes seconds. We are incredibly pleased to confirm we are now live after going through testing.”

The recent announcement brings the tally of global financial institutions that are signed up to the gpi to more than 200, with a daily transaction volume worth $100 billion across several hundred payment corridors, comprising a third of all SWIFT’s payment volumes.

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