Visa, which is the world’s second-largest card payment company, is set to incorporate the blockchain technology into its services. There are ongoing plans where the company has been building a blockchain that could overturn how banks use its customer’s payment information.
In a paper recently published by the company’s Research and development arm, they discussed ongoing plans on a system called LucidiTEE. The research paper describes the system as one to be used for sharing private data on the blockchain, securing it within a trusted execution environment (TEE) while using some policies to ensure both the receiver and the sender receive the output.
(N.B: The term LucidiTEE was coined from the words, i.e., TEE & lucidity.)
One of its applications includes the sharing of data between users and financial apps. This development would affect several data aggregators such as Finicity, Plaid, Envestnet Yodlee, etc.
Although Visa hasn’t responded to requests for comments up till now, there are speculations that LucidiTEE could allow banks to share data amongst themselves to develop Machine Learning algorithms. This would be useful for curbing fraud and prevent tracking apps from selling customer information.
For clarity, this is not Visa’s first involvement with Blockchain technology. It was formerly a member of the Facebook’s Libra association until it pulled out in October. It has also collaborated with Chain, a blockchain startup which has been acquired by Stellar.
Visa helps users to make international money transfers. It’s research arm also contributes to the cybersecurity and cryptographic community. Therefore, this project shows how Visa (similarly to other finance companies) aims to protect user data from multiple parties and allow users to control their data.
Data aggregators, on the other hand, are now an integral part of the financial services industry with millions of users globally. So, fin-tech apps have advocated for an “open-banking” procedure, which allows banks to share data with them via third-party data aggregators.
Thus, for LucidiTEE to perform excellently, the financial services industry would need to develop a strategy which all parties would follow. The banks also would need to consider the cost of working with data aggregators before deciding to take the leap or otherwise.
Nick Thomas, the co-founder of Finicity, commented on the project, saying that LucidiTEE would not provide the quality of services provided by data aggregators. He opined that although the technology presented as simple, issues on security, privacy, regulation, etc., makes it more complicated.