Visa Inc. announced Tuesday the commercial launch of its blockchain distributed ledger technology payments system B2B Connect after three years of development.

The network provides financial institutions the ability to execute high-value corporate payments across borders quickly and securely at very little cost.

“Launching Visa B2B Connect marks an important industry milestone which will accelerate the evolution of how commercial payments move around the world,” said Kevin Phalen, senior vice president of global head of Visa Business Solutions.

B2B Connect went into development just under three years ago when Visa adopted Chain Inc.’s blockchain platform in order to facilitate cross-border payments by large businesses and financial institutions.

The network uses blockchain, a secure distributed database that uses cryptography to make recorded history difficult to tamper with, and a unique digital identity system to keep bank transactions safe. The network will use a tokenization system to protect sensitive business information, such as banking details and account numbers, by encrypting the information and attaching it to transactions, which are in turn verified by the blockchain.

Visa said B2B Connect will transform the way that information is exchanged in business-to-business cross-border transactions.

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

The Visa B2B Connect launch will cover more than 30 global trade corridors, with an aim to expand to as many as 90 markets by the end of 2019.

The current incarnation of the network uses the open source Hyperledger Fabric framework from the Linux Foundation, in partnership with IBM Corp.

“Working together on Visa B2B Connect, we are combining the strengths of the world’s leader in electronic payments with IBM’s recognized expertise in helping scale distributed ledger technology,” said Marie Wieck, general manager at IBM Blockchain. “This is a unique example of how blockchain-based architecture can help transform B2B value chains by facilitating secure and transparent transactions globally.”

Visa has brought on a number of partners, such as IBM, in order to scale the B2B Connect network including Bottomline Technologies Inc., a business-to-business payment solutions company, and Fidelity National Information Services, Inc., a developer of financial software for big business.

“With Visa B2B Connect, we are leveraging Visa’s existing assets and our expertise in cybersecurity, data privacy, the scale of our network – and layering that with new elements of distributed-ledger technology to meet the unique needs of this industry,” said Sam Hamilton, senior vice president of data product development at Visa. “This lays the foundation for a service with the potential to transform cross-border payments.”

Image: Visa