Enterprise software provider R3 is teaming up with Mastercard to establish a blockchain solution for cross-border payments, the companies said in a press release on Wednesday (Sept. 11).
The new blockchain-enabled solution aims to bridge international payments infrastructures, schemes and banks via a Mastercard clearing and settlement network.
More than 300 financial services firms, technology companies, banks, regulators and associations are part of R3’s Corda ecosystem.
“Developing a new and better cross-border B2B payments solution by improving worldwide connectivity in the account-to-account space is central to Mastercard’s ambition,” said Peter Klein, executive vice president of New Payment Platforms for Mastercard. “Our goal is to deliver global payment infrastructure choice and connectivity as demonstrated through our recent strategic acquisitions and partnerships, including our relationship with R3. It confirms our commitment to innovation, both homegrown and through partnerships and acquisitions, to support advances and innovation in the increasingly complex global payment infrastructure space.”
The new operation combines R3’s blockchain expertise with Mastercard’s existing payment assets and distribution.
“We are excited to partner with Mastercard to help shape the future of the digital payments ecosystem. All institutions – large or small – rely on the ability to send and receive payments, but all too often the technology they rely upon is cumbersome and expensive,” said David E. Rutter, CEO of R3. “Cross-border payments can be a particular pain point. Corda was designed specifically for enterprise use cases such as this, and we look forward to supporting Mastercard in bringing blockchain-enabled payments businesses across the globe.”
In July, Mastercard closed on its acquisition of cross-border payments company Transfast, which works with both P2P and B2B payments.
Stephen Grainger, executive vice president at Mastercard, said cross-border payments have traditionally relied on a correspondent banking system that only worked well for larger corporates moving high-value payments within certain corridors. He added that the system works less well for transactions that lie below a $100,000 threshold, the hallmark of small to medium-size businesses (SMBs) that drive growth in cross-border payments and the global economy.