Union Bank of the Philippines (UnionBank) and international payments system Visa Inc. are fast-tracking cross-border bank-to-bank (B2B) payments, particularly from small and medium businesses.
In a press briefing in Pasig City, UnionBank announced it has partnered with Visa so that small and medium enterprises (SMEs) can send transactions directly to recipient banks.
The partnership will eliminate the requirement for an SME to open an account in each country where it has transactions, UnionBank president and CEO Edwin Bautista said.
“Here, you have a perfect situation because the banks are dealing with each other,” he said, noting that UnionBank clients will eventually be able to transact with most banks under the Visa network.
Bautista said the program will cut transaction costs between UnionBank and overseas banks by about 50 percent.
Banks under the pilot program include Commerce Bank in the United States, Shinhan Bank in South Korea, Sberbank in Russia, and United Overseas Bank in Singapore.
“Traditionally, for example, if an SME needs to pay a supplier in Brazil, he would request for an electronic fund transfer from his UnionBank account to his supplier’s account in Brazil. That could take three to five days and have to pass through several other banks, and pend confirmation,” UnionBank chairman Justo Ortiz said.
“With VisaB2B Connect, thanks to blockchain technology, the SME can initiate the transfer, receive immediate confirmation, and the supplier can get funds the next day or in some cases, in real-time,” he said.
Visa Inc. plans to partner with more banks—both local and overseas—to expand B2B coverage.
“UnionBank is one of the pilot partners in Asia Pacific for the Visa B2B Connect platform,” Vikram Kshettry, head of B2B Partnerships for Visa Asia Pacific, said.
“To get scale, you have to have multiple partners and that would be our aim in the future—increase the coverage,” he said. —VDS, GMA News