A first-of-its-kind infrastructure, built using open source technology and Visa’s core assets, helps solve a major pain point for banks and their clients
What does it take to bring a non-card-based payment platform to life from a technology perspective? My team at Visa faced this question over two years as we tried to solve a well-known pain point in the business-to-business (B2B) cross-border payment space. The problem: significant lag times when processing international commercial payments. The culprit: a complex bilateral system.
B2B payments made by check, ACH and wire transfer require multiple exchanges of data between the origin bank, the beneficiary bank and non-partnering intermediary banks spread across the globe. This less-than-optimal system can create challenges like data truncation, payment delays, and compliance issues. And that makes the entire process of exchanging high-value sums of cash inefficient and unpredictable.
Visa wanted to come up with a faster and more secure system for its bank partners and their corporate clients who were making B2B payments. We first realized we had to think beyond our traditional card-based payment network, VisaNet, as we sought to service the cash treasury side of banks. Visa B2B Connect, a non-card-based infrastructure, became the alternative multilateral relationship structure we needed. Transactions could flow from the origin bank directly to the beneficiary bank—no intermediaries needed.
This was breaking new ground for Visa and for the industry and depended on a decidedly responsible approach to innovation.
We started by looking at how to leverage our core capabilities— cybersecurity, data privacy and controlled access to the network— to develop a completely new non-card-based solution and the foundational rails to go along with it.
We studied distributed ledger technology capabilities and ways to leverage them to ensure security and payment stability. We integrated Visa’s core system capabilities with open source Hyperledger Fabric framework from the Linux Foundation, ultimately creating a scalable, permissioned network. This unique distributed-ledger-based architecture can enable significantly shorter transaction times—from weeks to one to two days.
Applying our experience opening up VisaNet, we designed the Visa B2B Connect architecture to protect participants while providing opportunities for multiple players to access and contribute value to the network. Our expertise in managing global network infrastructure for a highly regulated economic marketplace was critical here. Now banks can plug in and exchange value in an environment where compliance, control, governance, and security are all of equal importance. Data flows through our controlled data centers with high levels of security, offering banks and their corporate clients a rich set
of data (thanks to applied machine learning and AI capabilities). That’s a significant, transformational change.
We leveraged not only data encryption but tokenization of sensitive data. Visa B2B Connect’s digital identity feature tokenizes a corporation’s sensitive business information, such as banking details and account numbers, with a unique identifier for securing transactions on the network. This digital identity greatly reduces the chance for fraud that might otherwise exist with current international transaction methods, while helping enable companies to meet their compliance obligations within the regulated financial ecosystem.
Innovating for legacy systems
We had to be cognizant of the fact that, by bringing banks on board, legacy infrastructure would be connected to the network on day one. We created multiple implementation options for banks to tap into this new multilateral network in various ways. We built in the capabilities at the network level to translate old message formats into native new ones. We also worked with technology partners, like FIS and Bottomline, to act as payment hubs so that apre-built adaptor could enable seamless integration for our mutual bank clients from the start.
Innovating for the future
Visa, which has historically been a card-based network, enters a new payment flow with Visa B2BConnect. We've laid the foundational rails for what could expand into multiple product extensions. Today it’s a high-value cross-border payment network for our bank partners. Tomorrow it could service industries such as trade finance and supply chain at scale in different geographies, meeting unique market needs and applying the same levels of security and transparency that our partners have come to trust.