JP Morgan has started using blockchain technology to improve funds transfers between banking institutions globally, including payments originating from Taiwan banks to beneficiary banks in other markets. Called Confirm, the solution aims to help reduce the number of rejected or returned transactions caused by mismatched payment details, thereby lowering costs for both the sending and receiving banks.
By leveraging Confirm, a global account information validation application, partner institutions will be able to request confirmation of the beneficiary account information and receive responses directly from other participating banks receiving the requests in near-real time. Once the information is validated, the payment may be sent through J.P. Morgan’s global clearing solution PayDirect to route the payment in the most efficient manner.
The efficiencies offered by the Confirm and PayDirect solutions are expected to help improve straight-through processing rates, increase transparency and enhance customers’ end-to-end payment experience by reducing returns.
Testing is underway with 12 Taiwan lenders, including Taiwan Cooperative Bank, First Commercial Bank, the Shanghai Commercial & Savings Bank, Mega Bank, Taipei Star Bank, Taiwan Shin Kong Bank, CTBC Bank, for money transfers via PayDirect into Indonesia.
Confirm, introduced late last year, is among an expanding suite of new applications on J.P. Morgan’s blockchain-based Liink, an interbank information network of more than 400 financial institutions and corporates, including 27 of the world’s top 50 banks, across 78 markets. It was developed as a result of direct feedback from network participants to address their needs and challenges across the global payment ecosystem.
PayDirect is a solution that allows financial institutions to capture new flows by using existing pay-in methods and channels to pay global beneficiaries via various pay-out methods, with the benefits of lower end-to-end transaction costs, predictability and transparency.