JPMorgan Blockchain Cross Border Payment Network Attracts 75 Banks

During the last couple of years, banks throughout the world have begun studying the potential of blockchain technology in revolutionizing cross-border and inter-bank payments. This effort is especially relevant, granted that banks are well-known for payment processing delays, whereas blockchain technology offers an instant solution.

Because of this, JPMorgan, the Royal Bank of Canada and the ANZ funded the Interbank Information Network, commonly referred to as the IIN. For 11 months, the blockchain-based IIN system has been trialled to determine if blockchain technology is capable of speeding up payments affected by errors, additional bank compliance checks, missing data or faulty addresses.

To put things better into perspective, the IIN is a ledger that member banks can access in order to resolve the issues outlined above. Traditionally, if a cross-border payment encounters an error, the responsible bank would have to individually ask all participating banks for additional information. This process is time-consuming, inefficient, and leads to payments being held up for weeks.

With the appearance of numerous start-ups offering cheap blockchain-based payment solutions, banks are facing big competition risks. Such a system would help keep their payment services in-house, while keeping banks around as relevant and efficient payment service providers. It is not yet clear whether the IIN will make cross-border payments cheaper, but it has been determined that it can give them a considerable boost in speed.

So far, the IIN seems to be successful, since recent reports indicate that over 75 of the world’s largest banks have already joined the network – the list includes the funding members, alongside other big names such as Societe Generale, or Santander.

At this moment in time, the system is still being trialled out. JPMorgan has not released any statement regarding a future deployment date, but it’s likely that the system will become more common within the next couple of years. This will lead to an increased competition between banks and financial start-ups, as each continues to search for better, quicker and more innovative payment solutions.