Investment banking mogul JPMorgan Chase is considering expanding a current blockchain project to include payment features as it intends to seek competition with payment firms like TransferWise and Ripple.
The blockchain-based Interbank Information Network (IIN), in collaboration with Australia’s ANZ bank and the Royal Bank of Canada in 2017, presently enables more than 220 banking members to immediately address payments that encompass errors or get caught up because of compliance reasons—problems that usually takes weeks to resolve with several banks involved in the process.
The Financial Times reported April 21 that JPMorgan head of global clearing John Hunter said the IIN is quickly advancing and that the bank is “looking at the ability to do more at the point of settlement.”
Hunter said that JPMorgan has now established a feature that would enable real-time verification to confirm that the account a transaction is being sent is valid. At present, an error in the recipient’s details like the account number or sort code can lead to rejected payment days after it was sent.
On that note, Hunter said banks’ payment processing is still stuck “in the mid-80s to the mid-90s.” He added that the “5 to 20 percent of payments” that don’t go through due to error or compliance problems is “where we’re trying to alleviate some of that pain.”
According to FT, the settlement system is slated to go live by the third quarter of 2019, enabling both domestic and international payments.
The Interbank Information Network has been created on Quorum, the ethereum-based blockchain network introduced by the bank in 2016. JPM Coin, which was revealed in February, is also leveraging that platform as its underlying technology.
The FT also states that JPMorgan is building a testing sandbox—purportedly launching in the third quarter too—enabling fintech startups to utilize the IIN and eventually build and introduce applications based on its features.