RIP Ripple? Visa is Disrupting Global Payments with Blockchain


By HVY Journalists: San Francisco-based Ripple has been looking to make a dent in the global payments market with its XRP-powered crypto remittance platform xRapid, but Visa is all set to crash its party.

The American financial services company has just announced the commercial launch of Visa B2B Connect – a blockchain-based payments network that’s supposed to speed up cross-border payments securely.

Visa’s latest play

Visa’s B2B Connect platform is covering over 30 trade corridors globally at launch, but the company is planning a quick expansion to 90 markets by the end of 2019. According to a press release issued by Visa:

The network’s unique digital identity feature tokenizes an organization’s sensitive business information, such as banking details and account numbers, giving them a unique identifier that can be used to facilitate transactions on the network.

Visa is looking to disrupt the global payments industry with the help of Blockchain-based technology. It is based on Hyperledger Fabric, which is an IBM-developed blockchain software but comes with a few caveats.

For instance, Visa’s B2B Connect platform is primarily meant to take care of high-value business-to-business transactions. These transactions are usually $15,000 and upward in value, and reportedly represent 10% of the global cross-border payments market that’s currently worth $125 trillion.

Not surprisingly, Visa is looking to quickly expand this service. It is partnering with payments processing and financial technology company FIS, which will give Visa access to over 20,000 financial institutions who can opt for the blockchain-based B2B Connect instead of the traditional route.

In the end, it can be said that Visa seems to have noble intentions of making global payments faster and more secure with the help of blockchain technology. This is evident from the statement of Kevin Phalen, who is the global head of Visa Business Solutions:

By creating a solution that facilitates direct, bank to bank transactions, we are eliminating friction associated with key industry pain points. With Visa B2B Connect, we are making payments quicker and simpler, while enhancing transparency and consistency of data.

Ripple has no reason to worry

At first, one might think that the entry of a giant such as Visa into the blockchain-based payments space could spell the end of the likes of Ripple’s crypto remittance platform xRapid. After all, Visa has more than $11 billion in cash on its balance sheet that it can use to launch and quickly scale up new products.

Ripple, meanwhile, is currently in a soup thanks to fake volume reporting that’s taking a toll on sales of XRP token. But Visa’s entry doesn’t necessarily spell the end for Ripple’s xRapid for a couple of reasons.

First, as I mentioned earlier, Visa’s B2B Connect will primarily cater to high-value transactions. Ripple’s xRapid, on the other hand, can be used to pay for even your honeymoon.

So if you’re looking to make a small payment, you won’t be going to a big corporation such as Visa, but to Ripple’s xRapid.

The second reason why crypto lovers wouldn’t want to choose Visa’s B2B Connect is because the latter will have complete control of the platform. In simple words, B2B Connect isn’t decentralized, which means that it defeats the general purpose of cryptocurrencies. Visa will most probably have control over your data and would know where you’re sending money.

Given that Ripple is looking to quickly scale up its own platform, it can improve its user base and not get killed by Visa’s entry into cross-border payments because it isn’t selective about who it caters to.