Are there discussions around registry services ? I assume to handle transactions across ledger, one needs to identify the addresses and the ledgers. To interface with existing ledgers, we would need account number, servicing bank identifier …
I have the same concern: one big challenge to find the path to the target ledger is to define on which data addresses are based, and, consequently, with which kinds of registries messages will be routed. The card industry solved this with great effort via the use of BINs. When it comes to acounts (with an instrument other than card), I’m not sure that there are universal reusable solutions at the moment. Even the BIN method now have itslimits since this code has been pushed to bear every possible information.
Building registries imply a big investment, in design and finance as well, so the question seems to me quite important.
And I do not know whether there is a thread somewhere about it.
For accounts, each country has its own scheme but many are grouped in the BBAN (Basic Bank Account Number) specification. IBAN has been created to have a unique scheme: IBAN is basically an ISO Country Code, a check digit and a BBAN. With this scheme, there is finally one single verification mechanism. IBAN is mandatory in Europe (SEPA payment) and has been adopted by some countries out of Europe.
So, with an IBAN, the country code and the Bank Id in the embedded BBAN normally allows to identify the bank servicing the account, hence the ledger. That’s not enough to make a payment.
To make a funds transfer between accounts in different ledgers, the 2 banks need:
1. business connection: either be on the same clearing system or have an account relationship. There are multiple ways to get that information and multiple ways to finally execute the transaction.
2. technical connection: there are multiple solutions (eg. SWIFT) and more to come (in 2014, GSMA was referencing 200 mobile payment solutions for the unbanked). Payments is a big business and everybody is trying to get a stake.
All this works with some caveats:
1. high operating costs
2. despite the costs, about 3% of payments fail simply because the beneficiary information is not correct
3. social cost: finally, the cost of the system is added to the price of everything we buy.
Interledger proposition is interesting as it could leverage the “crypto-finance” approach and indeed, identifying the sources and targets in the financial ecosystem to be build is a basic requirement.
Thank you Stephane for your answer.
When considering how long and heavy is the process of adopting IBAN in the banks in the place of their usual local identifiers, it appears clearly that registry is a big question. For a bank, changing its identifiers or connecting to new ones is an awful thing.
So, I would appreciate to understand how this problem is “approached” by the WP group and Interledger group…
Does a transaction in the interledger system bears an IBAN and finds its way through IBAN registries ? So, for the adoption of a new protocol, the less identifiers change, the better it is…Except, of course, if the idea is to disrupt the whole system.
When the payment request is issued, if it is based on a transfer, there will be IBANs on it, most probably…so what is the strategic view of our groups on the corresponding registries (and routing methods) ?
We need a ledger that overlays URL and adds entry conditions so the user knows prequalification to engage trading pit or ledger.