Manila-based Union Bank is leading an initiative in the Philippines to promote the adoption of Visa’s blockchain payments platform, the Philippine News Agency reported.
Four rural lenders have joined the program, which aims to help smaller players become more efficient, said Henry Rhoel Aguda, technology and operations head of UnionBank.
In January this year, UnionBank became the first bank in the Philippines to adopt Visa’s B2B Connect. The platform, which was launched in 2016, allows financial institutions to provide faster and more reliable cross-border payments.
UnionBank chairman Justo Ortiz was quoted as saying at the time:
“Traditionally, for example, if an SME needs to pay a supplier in Brazil, he would request for an electronic fund transfer from his UnionBank account to his supplier’s account in Brazil. That could take three to five days and have to pass through several other banks, and pend confirmation. With VisaB2B Connect, thanks to blockchain technology, the SME can initiate the transfer, receive immediate confirmation, and the supplier can get funds the next day or in some cases, in real-time.”
Focus on rural banks
According to Aguda, the company will initially focus on the four rural banks that showed enthusiasm for the platform but added they are open to more partnerships.
“We want to grow from four right now to as many as we can support,” he said.
UnionBank president and CEO Edwin Bautista said the bank is aiming to tap the small and medium-sized enterprise (SME) partners of their current corporate clients as potential customers for the new platform because blockchain is seen as a faster, more secure and cheaper way to send cross-border payments.
"These are the recipients of the payments, so there is a connect to know them. We're not able to reach them much before, but now, with data analytics, we're starting to understand more their behavior. We're able to identify the flows that go into them and all of that stuff.”
Visa is planning to commercially launch B2B Connect in the latter part of this year. The financial services giant has also lined up Commerce Bank in the United States, Shinhan Bank of South Korea, Sberbank in Russia and United Overseas Bank of Singapore for the pilot implementation of the blockchain payment platform.