DBS, JPMorgan and Temasek set up open platform to tackle pains behind interbank payments

DBS, JPMorgan and Temasek will set up an open industry platform to tackle the age-old pains behind facilitating flows for payments, trade and foreign exchange settlement.

This will be done through a new technology company, Partior, the partners said in a joint statement on Wednesday.

Once the platform is up and running, Partior is meant to provide round-the-clock infrastructure, allowing financial institutions and developers to co-create applications to support foreign exchange payment versus payment, delivery versus payment (DVP), and peer-to-peer escrows to complement and value-add to global financial ecosystems.

The platform, which uses blockchain, will focus on facilitating flows primarily between Singapore-based banks in both US dollars and Singapore dollars. It intends to expand its service offerings to other markets and in various currencies.

Partior aims to disrupt the traditional cross-border payments "hub and spoke" model that has resulted in issues including multiple validations on payment details by banks, which lead to costly and inefficient post transaction exception handling and reconciliation activities.

DBS, JPMorgan and Temasek shared that the platform's launch and availability of services is subject to obtaining necessary regulatory approvals, and will start operating upon fulfilling these requirements. They added that pilot trials are expected to begin in the second half of 2021.

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Said Piyush Gupta, chief executive officer (CEO) at DBS: "By harnessing the benefits of blockchain and smart contracts technology, the Partior platform will address current points of friction. The 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."

Chia Song Hwee, deputy CEO of Temasek, added that finding the right approach to payments transformation using new technologies should be a priority in efforts taken to bring existing infrastructure into the next stage of digitalisation.

To add, Partior's platform will be designed to complement ongoing central bank digital currencies (CBDC) initiatives and use cases.

Last week, a Monetary Authority of Singapore (MAS) senior official said in a LinkedIn post that Singapore may "soon hear about the commercial launch of a multi-currency payment system for digital currencies".

This came after Singapore had worked on Project Ubin in 2019, a five-year project that looked at models for cross-border payments using blockchain and CBDCs. MAS had partnered the Bank of Canada, and with the financial industry to consider the benefits of such models.