How JP Morgan, DBS, Temasek are reimagining global payments
Investment firms JPMorgan, DBS and Temasek have joined forces to bring the existing infrastructure of global payments into the digital era, with the development of a new industry platform that will fast-track value movements for payments, trade and foreign exchange settlement.
Developed under new tech company, Partior, which means ‘distribute’ and ‘share’ in Latin, and extending Project Ubin, an industry initiative by the Monetary Authority of Singapore to explore the application of blockchain technology involving multi-currency payments and settlements, the platform is a “global watershed moment for digital currencies, making a move from pilots and experimentations towards commercialisation and live adoption”, says Sopnendu Mohanty, Chief FinTech Officer at the Monetary Authority of Singapore.
This innovative approach to payments transformation using new technologies “will have tangible impact on global payments”, says Temasek’s deputy CEO, Chia Song Hwee.
Why is there a need for the Partior platform?
According to the partners, the future of global payments is on the cusp of a fundamental shift due to digital acceleration and as their clients transition towards multiple bank platforms, de-centralised networks and programmable money, and there’s clearly a need for more efficient digital clearing and settlement solutions across the banking industry than is currently offered.
The current traditional ‘hub and spoke’ system of global payments poses many pain points, including multiple validations on payment details by banks, which translates to costly post transaction exception handling and reconciliation activities.
As DBS’ CEO Piyush Gupta, the traditional model often “results in deals as confirmations from various intermediaries are needed before a settlement is treated as final”, which in turn has knock-on effect and “creates inefficiencies in the final settlement of other assets”.
So, how will Partior solve this?
To address the current challenges, Partior plans to use blockchain solutions to enable next-gen, programmable value transfers for participating banks and their clients in real-time across a common and open platform.
“By harnessing the benefits of blockchain and smart contracts technology, the Partior platform will address current points of fiction” and as an open platform will “enable banks around the world to provide real-time cross-border multi-currency payments, trade finance, foreign exchange and DVP securities settlements on a world-class platform, with programmability, immutability, traceability built into its suite of services.”
How will it work exactly?
Once complete, the platform aims to provide 24/7 infrastructure enabling financial institutions and developers to co-create applications that support use cases such as FX Payment Versus Payment (PVP), Delivery Versus Payment (DVP) and Peer-to-Peer escrows to complement and value-add to global financial ecosystems.
To encourage participation across the banking industry, Partior will actively engage leading banks to join the platform to establish the scale required to benefit the industry. And according to Temasek’s Chia Song Hwee, there is already good interest “from other banks and partners”.
The platform will begin with a focus on facilitating flows etwen Singapore-based banks in both USDS and SGD before expanding service offerings to other markets and across different currencies.
