Accenture (NYSE: ACN), SAP SE (NYSE: SAP) and R3 are collaborating and co-innovating to build a real-time gross settlement system that will enable faster, more efficient, reliable and secure payments between banks and customers.
With real-time gross settlement (RTGS) systems, electronic funds transfers between banks occur in real time and settle on a one-to-one basis. This process is often used for high-value transactions that require immediate clearing and are typically handled by central banks.
The payment platform plans to allow for integration and interoperability between distributed ledger technology (DLT) -based and classic government-issued payments and settlements. The co-innovated prototype design uses currency tokens to facilitate end-to-end settlement. Currency tokens are used in preference to digital currencies in this design because they serve as a proxy for standard central bank fiat currency and use cryptography to increase security and authenticity. The prototype provides the flexibility that is essential to adopting and integrating new payment technologies while allowing banks to maintain their current payment formats.
“Because the current payment settlement infrastructure is highly complex and fragmented, RTGS systems that leverage DLT and cryptographically secure tokenized payments can help central banks improve efficiency and security,” said John Velissarios, a managing director and global blockchain technology lead at Accenture. “The RTGS prototype, designed in collaboration with SAP and R3, demonstrates the next stage of efficiency in payment systems and ultimately, paves the way to linking to tokenized-assets, like equities, to create an increasingly integrated and seamless financial services ecosystem.”
The prototype uses the SAP Payment Engine application, which serves as the central hub for payment initiation, processing, clearing and settlement and integrates with R3’s Corda platform to enable interactions with RTGS systems, delivering nearly seamless interoperability between conventional and token-based payments. Leveraging Accenture’s experience in central bank clearing and settlement, and blockchain capabilities, the prototype will enable peer-to-peer payments between banks that have adopted DLT as well as those that have not.
“As market participants accelerate their use and acceptance of digital payments, payment providers and banks need to adapt quickly and prepare for these new forms of payments,” said Falk Rieker, global head of IBU Banking at SAP. “The RTGS platform is designed to enable banks and payment providers to easily adopt and integrate DLT-based payments on their existing platforms, helping banks to safeguard as well as augment the value of their investments.”
“As digital currencies gather momentum, the need for interoperability between conventional and token-based systems is key in meeting the promises of tokenization,” said Cathy Minter, chief revenue officer at R3. “Corda was designed to execute transactions seamlessly from the outset, with the highest levels of certainty and security. Through our relationship with Accenture and SAP, R3 is collaborating with two of the tech industry’s major players to provide a real-time gross settlement token-based exchange. The end result is nearly instantaneous settlements, which will reduce friction throughout the transaction chain.”
Corda enables businesses to transact directly and in strict privacy using smart contracts, reducing transaction and record-keeping costs and streamlining business operations.
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R3 is an enterprise blockchain software firm working with a broad ecosystem of more than 300 firms across multiple industries from both the private and public sectors to develop on Corda, its open-source blockchain platform, and Corda Enterprise, a commercial version of Corda for enterprise usage.
R3’s global team of over 200 professionals in 13 countries is supported by over 2,000 technology, financial, and legal experts drawn from its global member base.
The Corda platform is already being used in industries from financial services to healthcare, shipping, insurance and more. It records, manages and executes institutions’ financial agreements in perfect synchrony with their peers, creating a world of frictionless commerce. www.r3.com.
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