With blockchain technology revolutionizing the way corporations handle data management, IBM announced the release of their Blockchain World Wire in July 2018. With this, the blue-chip firm offers yet another way how businesses can use the innovation to stay ahead of the competition.
In an increasingly globalized world, corporations partnering with other enterprises in different corners of the economy is becoming commonplace. Despite the internet making collaboration and communication immensely easier, cross-border payments still are lacking.
ACH and SWIFT payment methods, despite their household name, still take days to settle. On top of that, they can be costly after all of the currency conversions and the legal tape that must be satisfied. Current methods require “a series of intermediaries for both clearing and settlement,” with each additional step in the middle “adding time and cost to the process.”
IBM’s Blockchain World Wire looks to accelerate this clearing and settlement process to near real-time, by using digital assets to settle transactions. The assets function as agreed-upon storage of value exchanged between sender and receiver.
Stellar Lumens’ blockchain technology is being leveraged in yet another partnership with IBM to achieve this feat. IBM isn’t the first company to partner with Stellar to help close the gap between countries, with a collaboration between TransferTo Ink and Stellar in late July looking to achieve the same objective.
This circumvents the need to satisfy multiple parties about currency conversions, taxations, and the like. By forgoing these steps, they can transfer payments to anywhere in the world, from anywhere in the world, at a fraction of the cost and time of conventional international banking.
The payments industry is growing at an annual average rate of seven percent and is expected to swell to a nearly $2 trillion industry by 2020.
IBM also has significant weight in the financial industry, unlike TransferTo Ink. Ninety-seven percent of the world’s largest banks are clients of IBM, with 90 percent of global credit card transactions also being processed on IBM mainframes.