In order to fend off competition from payment startups, such as TransferWise and Ripple, JPMorgan Chase, the investment banking giant, is planning to expand an existing blockchain project to include settlement features. JPMorgan all set to expand Blockchain settlement project IIN.
Set up in partnership with Australia’s ANZ bank, and the Royal Bank of Canada back in 2017, the blockchain-based Interbank Information Network (IIN), provides a number of solutions. It has over 220 banking members, who it currently allows to quickly address payments that contain errors or get held up for compliance reasons. These are problems that can take weeks to solve because of multiple banks being involved across the payment chain.
It was reported by The Financial Times last month that the head of global clearing at JPMorgan, John Hunter, said the IIN is developing fast and that the bank is “looking at the ability to do more at the point of settlement.”
Hunter said, that a feature that would allow for real-time verification that a transaction is being sent to a valid account has now been built in by JPMorgan. Currently, a payment may be rejected days after it is sent if there is any error in the recipient’s account number, sort code, or any other detail.
According to Hunter, on that issue, banks’ payment processing remains “in the mid-80s to the mid-90s”. The company is focusing on the “5 to 20 per cent of payments” that fail, he said, because of an error or compliance problems.
The FT report stated the settlement system will allow both domestic and international payments, and will be live in by Q3 2019.
The Interbank Information Network has been built on the same underlying technology for the bank’s much reported digital currency, JPM Coin. Details of the coin were made public in February of this year. The platform is called Quorum, and is an ethereum-based blockchain network revealed by JPMorgan in 2016.
JPMorgan is also setting up a testing sandbox, according to The FT. The news source reports that the endeavour will allow fintech startups to use the IIN and ultimately develop and launch applications based on its features. The testing sandbox is also said to be launching in Q3.