Visa has inked a deal with LINE, Japan’s answer to WhatsApp, expanding their existing relationship. The crux of the agreement is that all of LINE’s 187 million users globally will be able to apply in-app for Visa cards. The blockchain angle is that LINE Pay and Visa plan to use blockchain for B2B and cross border payments.
Visa, in its push to compete with SWIFT, already has its enterprise blockchain B2B Connect platform which targets high-value corporate payments which it has been working on since 2016.
The payment company seems to be driving blockchain-based cross-border payments as a big part of its up and coming offerings. This deal with LINE corroborates the fact, as well as their recent acquisition of UK-based Earthport to expand its cross border payment reach.
Visa is also at the forefront of Coinbase’s cryptocurrency card offering as they helped the exchange roll out debit cards to UK-based customers.
Burgeoning Blockchain businesses
Both Visa, and LINE, are actively involved in blockchain with the Japanese messaging app last year unveiling its blockchain called LINK chain, where the LINK token is primarily used for rewards.
LINE, as a primary business, is expanding rapidly. In 2018 revenues of Yen 207 billion ($1.9 billion), up 24 percent from 2017, were reported. It is thus unsurprising that the company is looking to future growth patterns and integrating cryptocurrency and blockchain into its model. This is something that is also expected to happen with Facebook-owned messaging app, Whatsapp.
Visa’s B2B Connect is also big business with the payment company forming a partnership with IBM to integrate Hyperledger Fabric for this product.
“As part of the B2B Connect platform, Visa is integrating open source Hyperledger Fabric framework from Linux Foundation with Visa’s core assets. This will help provide an improved process to facilitate financial transactions on a scalable, permissioned network,” a Visa spokesperson said.
The B2B Connect product can be seen as an alternative to the correspondent banking system. Through the blockchain, payments can be remitted between banks across the Visa network with the company eyeing its use in verticals such as supply chain, trade, and institutional banking.
Important partnership
The growing partnership between Visa and LINE is positive for not only the two companies but also for the expansion and adoption of blockchain technology. With both actively seeking out ways in which to integrate blockchain, there is scope in the future for everyday customers of LINE, and those on the Visa network, to be exposed to the technology.
When LINE and Visa are ready to make a step up to using blockchain for payments on a more everyday user level, a solid business foundation will already be laid.
“We are impressed by the potential of LINE’s distribution power and consumer loyalty to further drive the growth of the global, open-loop payments ecosystem to benefit all players on our network – consumers, merchants, and issuing and acquiring banks,” said Chris Clark, Regional President, Asia Pacific, Visa.
Hints of what’s to come
While there is not much laid out in black and white as to what LINE and Visa are planning to do in the emerging Fintech space, there are enough hints to suggest these additional partnerships are only the beginning.
The two companies have said they will collaborate on “innovative financial experiences” in the areas of global payments, transfer platforms, and blockchain, with the planned blockchain offerings, not only enabling B2B and cross-border payments but also “alternative currency transactions.”
