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Blockchain: The Key to Faster Payments Reconciliation?

  • By Andrew Deichler
  • Published: 10/15/2015

BitcoinSINGAPORE -- While some of the buzz surrounding bitcoin has died downed considerably since the days of Mt. Gox, blockchain—the virtual ledger that powers the cryptocurrency—remains a hot topic. Many banks and even corporates are now looking at how they might be able to implement this innovative technology for their own purposes. During a session on real-time payments at Sibos this week, experts were asked whether blockchain technology could be the solution for faster payments reconciliation.

Craig Tillotson, CEO, Faster Payments Scheme Ltd., responded that it’s possible, though it may not be appropriate for a domestic real-time payments scheme. “Domestically, I find it hard to see that a blockchain structure could deliver as cost-effectively as a relatively simple centralized system,” he said. “For complex, cross-border transactions, there’s lots of information, lots of reconciliation, so there might be something there.”

Ather Williams, head of global transaction services, Bank of America Merrill Lynch, believes that blockchain has the potential for faster payments reconciliation. “Of all the technologies that we’ve looked at, it’s about scalability,” he said. “Are we ready for the speed, the robustness, the resiliency that you require to operate in the environment of payments? So part of the process is to provide additional data.” Williams concluded that blockchain might be a way to reconcile that data, but “I don’t think we’re there yet.”

Karin Flinspach, head of cash products, transaction banking for Standard Chartered agreed that blockchain has a lot of potential for faster payments reconciliation; the question right now is how it would be regulated. “We see already here in Singapore, [the Monetary Authority of Singapore] is already experimenting with blockchain and I’m sure there’s going to be some experimenting in the payments space coming soon,” she said, concluding that she is “quite confident” that blockchain would be able to solve some of these issues surrounding real-time payments reconciliation, “provided it’s in a consensus-based model.”

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