How high-tech blockchain is changing the payments world

By | 2 minute read | May 9, 2019

Whether a financial institution is a universal bank offering a broad array of products and services or a niche digital startup, the basic challenges are the same: providing cybersecurity, reducing compliance costs and speeding time to market of new products and services.

We at Mbanq know this because we provide a digital banking SaaS platform that can power any bank. Our sweet-spot customers, however, are the neobanks, challenger banks and fintechs that must be fast, agile and lean to outpace larger, more resource-rich competitors.

With all digital channels built in, our core platform delivers services that appeal to mobile-first millennials and tech-savvy consumers. Our cybersecurity team is among the world’s strongest. We reduce compliance costs by providing a single point of truth, which lets customers extract compliance data without having to analyze multiple systems and module interfaces.

Accelerating time to market

To address time-to-market, the core platform includes every service, letting customers rapidly activate whichever ones they choose. That’s why we continually add the latest digital services, including multicurrency support for fiat currencies and cryptocurrencies such as Bitcoin and Etherium. These capabilities dovetail nicely with our recent collaboration with IBM to rollout IBM Blockchain World Wire as a standard feature in our software.

World Wire is a new global payment rail for clearing and settling cross-border payments. We already support the SWIFT and Ripple payment rails, but we believe World Wire has the potential to transform the payments landscape.

IBM’s global reach is a plus. It is reported that 75 percent of the world’s financial transactions pass through IBM systems every day. Working with IBM’s strong blockchain team gave us confidence in World Wire’s technical underpinnings. Perhaps most important, the service is fast and low cost—exactly what the payments market demands.

Powered by the IBM Blockchain Platform and using the Stellar protocol, World Wire makes it possible for two financial institutions to simultaneously clear and settle cross-border payments in seconds, irrespective of their location and currencies.

Capitalizing on blockchain’s power

The creation and direct transfer of a stable digital coin accomplishes the trade by bridging between fiat currencies today, and, in the future, any asset class. This eliminates the need for multiple intermediaries that can increase costs and extend transactions to days and even weeks. With SWIFT, for instance, settlement time is  typically T+3 or T+4, three or four days. With World Wire we achieve T+0, between 3 and 30 seconds.

Another plus is that blockchain smart contracts can automate settlements. And transaction details are immutable, transparent and secure once recorded in the distributed ledger.

A key to any blockchain solution is growing the network to a critical mass of members and transactions. Mbanq facilitates this by pre-integrating Word Wire into our core. Banks, along with credit unions, remittance agencies, money changers and other financial providers, can deploy it quickly without stumbling over APIs and programming issues. After onboarding with IBM into the World Wire network, they can be up and running in a few days.

My prediction is that 10 years from now, IBM Blockchain World Wire is likely to dominate the payments market. We are privileged to contribute to this amazing opportunity.

Listen to Vladimir Lounegov talk about IBM’s global reach along with their strong blockchain team: