Organizations considering Tradeshift on the electronic invoicing and dynamic discounting side of the procurement and AP fence also owe it to themselves to investigate a range of other upstart solutions in the supply chain finance space. One of these providers in Oxygen Finance, an organization with an equally bold vision to displace p-cards by leveraging a proprietary network environment that greatly reduces the borrowing cost for suppliers and improves the rate of acceptance in early discounting programs. Oxygen's main claim to fame besides their underlying payment architecture, which is quite unique through its simple but elegant execution that enables the ability to support multiple funding models while ensuring the capture (and agreement) of suppliers to participate or not in an early payment program.
The Oxygen model took years to finally get off the ground because of the similar audacity of its vision, but they're finally gaining some well-deserved early customer momentum. Part of the reason is that treasury departments, banks and third parties can all provide the capital (or a combination thereof) under the Oxygen model. This of course provides the greatest degree of flexibility to the buying organization. Oxygen has also thought through how to capture much of the same level of enrichment data that card providers get their hands on and can provide back to procurement organizations wanting to incorporate such information into spend analyses and other supplier management initiatives.
Aside from Oxygen, there are certainly many other providers in the growing world of supply chain finance including the Receivables Exchange (which we once noted, despite its attempt to replace the shady world of factoring, still "markets like a loan shark"). But another vendor on our list that we can't get out of mind that is worthy of checking out is Pollenware, which has figured out a means of creating a market-based clearing price for early payment based on a set pool of available funding. It's nifty, it works and it can generate a massive working capital return.
Yet the problem with Pollenware is that suppliers still get themselves into paying taking a large, double-digit APR hit by participating in the program (although in their case, it is self-inflicted). Perhaps models like those which at least one bank we know is providing (highlighted in the first post in this series) along with Tradeshift and Oxygen Finance will at long-last bring the promise and returns of early payment discount alive without increasing supply risk by causing the most at-risk suppliers to get a buzz cut when all they really needed was a trim.
- Jason Busch