Facebook’s Novi wallet and FastPay system maybe 7 times faster than Visa Payment Networks

Facebook has been experimenting with its proposed Libra digital currency for a while now. It is basically a permissioned block-chain-based payment system which will be managed through the Libra Association. To carry on the transactions between different parties, Facebook has introduced its Novi wallet. Currently it is all in the experimental phases, but the plan in simple words is to introduce a new payment method which is as easy as sending a message to someone through their favorite messaging apps. All you will need to do is to add money to your Novi wallet, and Novi will convert in into Libra digital currency. Now, you just have to select whom to send this money to, check out the exchange rates for the amount you want to send them, and just hit transfer!

As much as it sounds fun and practical, the researchers who are working on the development of this whole system have recently made an interesting claim. They have presented a paper and have proposed that Facebook’s digital payment system will most likely be seven times faster than the Visa system.

In this paper, they have told about a transaction settlement system, FastPay, which will be used to settle cryptocurrency payments and it will also support retail payments in fiat currencies. The researchers and scientists from the Novi division are currently experimenting on it and so far, they have achieved to manage more than 80,000 intracontinental transactions per second in less than 100 milliseconds. They have also managed to do so with around twenty different payment authorities and facilities.

The Bank of International Settlements called off the whole block-chain payment technology by saying that it is ambiguous in terms of settlement finality, but the researchers of Novi have proposed in their paper that FastPay will take care of this ambiguity issue by enabling different payment authorities to have joint account balances with settled pre-funded retail payments between various accounts. This way, the researchers have provided a subsecond latency confirmation for physical point-of-sale payments as well as providing a comparable capacity for volumes of peak retail card network and real-time gross settlement.

They have also claimed that FastPay will eliminate all types of credit risks related to counterparty and net settlement issues. It will eliminate the need for intermediate banks and the involved authorities will not have to go for complex financial contracts amongst them.

The researchers built an experiment of the FastPay system on Amazon Web Services. They saw that FastPay could support up to 160,000 transactions per second for a load of 1.5 million transactions across 48 crores. Now, this is almost seven times faster transaction rate in comparison to the Visa payments network. In another experiment in the UK, FastPay did even better.

These are some best-case scenarios, but if this whole project turns out to be as good as it sounds now, it is going to be quite revolutionary!

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