JP Morgan and their blockchain program for global payments, the Interbank Information Network (IIN), has just been joined by 75 new members. The association’s goal is to test solutions developed on a distributed ledger to increase efficiency in global payments.
Global Payment Industry
The global payment industry, involving international transfers and interbank transactions, is one of the areas ripe for disruption – transfers take a considerable amount of time and cost, and cause plenty of friction between institutions. At the moment, international payments are wired through different bistro accounts to reach their destination and are subject to corresponding banking partnerships, working diversely in different regions of the world. This means that one international transfer can involve 3-4 middlemen firms, with conflicts taking several weeks to resolve.
Blockchain makes peer-to-peer financial messaging faster, cheaper, and a more transparent process. By using a common ledger, the participating banks can communicate instantly, see moving assets with full transparency, and accomplish transactions in a matter of hours. There is already a number of rival payment offerings, many coming from outside the traditional banking sector, such as Ripple or Stellar. According to Jason Goldberg, Bank Analyst at JP Morgan, “Blockchain is a way to keep more of that [business] in-house.”
What is the Interbank Information Network?
The Interbank Information Network was originally launched in October 2017 by JP Morgan Chase, Australia’s ANZ, and the Royal Bank of Canada to facilitate interbank payments on the blockchain.
It is a platform built on Quorum, an Ethereum-based blockchain developed by JP Morgan. Emma Loftus, head of global payments and foreign exchange for JP Morgan’s Treasury Services, described the Interbank Information Network as:
“IIN will enhance the client experience, decreasing the amount of time – from weeks to hours – and costs associated with resolving payment delays. Blockchain capabilities have allowed us to rethink how critical information can be sourced and exchanged between global banks.”
Now IIN has been extended with 75 new members, such as Societe Generale and Santander. Current transactions amount up to $14,500, although that number is expected to rise rapidly within the new extended network.
JP Morgan, the IIN, and its 80 members are just some of the many examples of how blockchain technology can be embraced to increase efficiency, reduce cost, and establish trust. The distributed ledger technology makes transactions possible like never before.
Stay tuned for more news on how blockchain is changing business!
Image Credit: Ben Sutherland