Four rural banks have partnered with Union Bank for blockchain technology-reliant payment system and officials of the publicly-listed universal bank vows to be help the smaller banks become more efficient.
In a briefing, UnionBank Senior Executive Vice President and chief Technology and Operations officer Henry Rhoel Aguda said they are helping the RBs, which he declined to identify, “elevate their capabilities.”
“We’re co-creating the blockchain platform to be used by the rural banks,” he said.
UnionBank is the first Philippine bank chosen by Visa for the latter’s B2B Connect, which is a business solution
platform that allows financial institutions to provide their clients fast and secure cross-border payments.
Other banks that VISA tapped for the pilot implementation of this payment platform include Commerce Bank in the United States, Shinhan Bank of South Korea, Sberbank in Russia and United Overseas Bank of Singapore.
Visa is set to commercially launch the platform late this year.
The platform uses what is called the blockchain technology, which allows transfer of funds real time or the next day at the most instead of around three to five days at a cheaper cost.
Aguda said they want to focus now on the first four RBs that decided to use the business solution platform but is not closing their doors for more tie-ups.
“We want to grow from four right now to as many as we can support,” he added.
Since the platform is seen as a more secure, faster and cheaper way to conduct cross-border payment transactions, UnionBank President and CEO Edwin Bautista earlier said they were targeting to tap small and medium enterprises (SME) partners of their existing corporate clients as prospective clients for this system.
“These are the recipients of the payments so there is a connect to know them,” he said.
“We’re not able to reach them much before but now, with data analytics we’re starting to understand more their behavior. We’re able to identify the flows that go into them and all of that stuff,” he added.