For many the blockchain has been seen as one method of quickening payments that are cross-border, and now the movement, which includes many startups making private moves, just received its highest-profile supporter in IBM, after Big Blue announced a solution focus of its own on banks.
IBM has joined forces with Stellar a blockchain startup and Kickex a payment company to launch a payment system that is cross-border for banks. The system uses blockchain to reduce settlement time and drop the cost of global payments for consumers and businesses.
At present, international transactions can take days, and in some cases weeks for them to be completed, which in turn has created a great deal of frustration that blossomed into services such as TransferWise, but as good as those services have become, they are solutions for the savvy consumer or smaller businesses rather than for everyone.
Blockchain solutions for banks will address the root cause, as well as minimize possibilities of errors due to a ledger-based system along with providing flexibility and transparency to banks.
IBM said for example its service is capable of being used to connect a Pacific island farmer with a buyer located in Indonesia, while it covers more than only the payment.
IBM said blockchain would also record the contract terms, manage the trade documentation, allowed for the farmer to use collateral, obtain necessary letters of credit and to finalize the terms of the transaction with an immediate payment, carrying out trade globally with relative ease and transparency.
That is an objective for the long term, but the system already is being used across 12 different currency corridors from the Pacific Islands and the UK, Australia and New Zealand.
Within a period of one year, it is expected to hand over 60% of all cross-border payments from the retail industry in the South Pacific and plans to go far beyond just that.
Over a dozen banks have joined as part of the first group that is working in the program, which is planning to move into Southeast Asia, South America and other regions during the early part of 2018.
The system is operated on the Blockchain Platform of IBM that itself is on the Hyperledger Fabric open source that powers Blockchain as a service that was announced in early 2017.
Recently IBM partnered with retail giant Walmart as well as others to uses blockchain to make food safety better via increased traceability and transparency.