The strange tale of RFID technology and supply chain finance

- August 28, 2014 3:28 AM | Categories:

index Radio Frequency Identification (RFID) has been around for decades, and has appeared to be the “it” app for transforming supply chains by enabling real-time data feedback at a container, pallet, case and even individual-item level. The journey of RFID in the consumer packaged goods to retail supply chain has been, from visions of supply chain transformation to now, a very slow crawl.  In 1999, a trio of academics founded the Auto ID Center at MIT, which focused on a new path for RFID technology. In June 2003, Walmart made its first announcement about its planned supplier EPC tagging program, which […]

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Nipendo’s Early Pay Solution Opens New Opportunities

Trade Financing Matters - Free White Paper Download
The Nipendo model represents a next-gen procure-to-pay platform, and is in line with the new trend of companies developing early pay solutions in order to create liquidity to their supply base. Find out more about Nipendo's spend coverage, validation solution and the innovative discounting solutions that can capture the long tail of procurement with this new, downloadable paper from Trade Financing Matters.

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How to get the Bank Payment Obligation out of the Mud

- August 27, 2014 3:40 AM | Categories: ,

mud boots The Bank Payment Obligation (BPO) has been propped up as an alternative settlement instrument for cross border trade. What SWIFT did through the ICC is develop a set of BPO rules and related ISO 20022 messaging standards. But are corporations adopting them?  The short answer is no, so far volume is minuscule. See SWIFT’s Bank Payment Obligation continues to struggle. To me, the BPO was designed to keep the banks intermediated in the cross border trade flow. That is not necessarily a bad thing. The chief reason is that finance can be enhanced because, for many corporate and commercial clients, […]

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Know your documentation when financing cross border

- August 26, 2014 4:35 AM | Categories:

U.S.-Customs-seizures-300x223 Much of the China-USA trade flow of goods is financed by U.S. or Chinese banks or trade finance and factoring companies. I have written about a few of them. (See – Capital Business Credit helps extend terms for Importers) Some consumer and electronic imported goods may require the permission of a trademark owner to import them. Failure to have a licence may hold up goods in customs and impact financing arrangements. Stephen Perl, CEO of 1st PMF Bancorp, provided anecdotal evidence that several factoring companies claim the Customs Border Patrol (CBP) is detaining and seizing a much higher percentage of […]

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Doing the Math on new Working capital models – Where’s all the Money Going?

- August 25, 2014 2:49 AM | Categories: ,

PatentedAlgorithms2 Are new working capital models sustainable? For many models, we have moved beyond proof of concept and are now trying to reach beyond burn rate to profitability. That is challenging. We only have to look to TheReceivablesExchange small business solution, which is responsible for trailblazin a new online factoring model for small business back in 2008 but shut the program in March 2013, to know it’s hard work. Looking at various business models which involve “selling” suppliers money, vendors’ projections versus reality can be far apart. The first challenge is when you sell money, many times using call centers — […]

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Apple iTunes next to join this payment thang?

- August 22, 2014 3:46 AM | Categories:

index I am excited to go to this year’s Sibos event in Boston.  There has been so much noise around P2P payments, new pcard models, real-time payments and other disruptive cheap, free, low cost solutions that I look forward to engaging with both banks and vendors alike to gain their perspectives. Domestic money transfers has always been the easy puzzle to solve. It’s moving money cross border that gets into the real headaches. I have long used international wires and have found the banks to be expensive, lacking in remittance information, and involving multiple banks where the left hand doesn’t know […]

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Lets clean up the confusion around Supply Chain Finance Nomenclature

- August 21, 2014 2:38 AM | Categories: ,

The term supply chain finance is not universally accepted nor well defined. The traditional lending model is starting to give way to supply chain finance with the thought around using various events or triggers in the supply chain to release cash. See – Information Advantaged Finance There are five main triggers that we see for supply chain finance that can involve taking information to trigger liquidity. They are: 1. Purchase order issuance 2. Materials ordered by supplier 3. Verification of shipping status 4. Invoice issued 5. Invoice approved From our discussions, no bank, finance house, vendor or logistics company is […]

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What the White House and the SEC can do to push SupplierPay

- August 20, 2014 1:55 AM | Categories: ,

With the SupplierPay program, the White House explicitly does not want payment term extension. We can see why that policy standpoint makes sense. Financing for SMEs has not yet recovered from the credit crunch. Securing a bank loan isn’t as difficult for small businesses today as it was during the recession. However, it’s still not as easy as it was prior to the collapse — and that appears to be holding back the broader economic recovery. This is of particular concern to policymakers since SMEs employ approximately 66 percent of private sector workers in the United States. Today, Johnson & […]

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Is interest peaking for start-up Supply Chain finance and Payment deals?

- August 19, 2014 2:49 AM | Categories: ,

The recent news of Taulia receiving $27 million in Series D funding, and others in the payment or finance space either being acquired (Demica) or receiving private equity injections (TraxPay), begs the question are we at a peak of interest for finance and payment start-ups? According to the data, it would appear so. Crunchbase reported that venture-based funding rounds to payments companies fell from 59 startups in the third quarter of 2013 to 41 during the second quarter of this year. But on the flip side, there continues to be tremendous interest by private equity and non-bank investor people I […]

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Do banks have something to fear with Demica and its investment bank partners?

- August 18, 2014 2:46 AM | Categories: ,

123332-c3d90a3dd9413db42544d93a2e5e74d1-medium_jpg The sale of Demica a few weeks back appeared to be purely a sale initiated by J.M. Huber to the investment bankers JRJ Group, TomsCapital and 76 West Holdings. Let’s face it. This could have been PrimeRevenue being taken out by a Hedge Fund run by George Soros with deep pockets. All of a sudden, these vendors would no longer need the banks to fund the assets they generate. The investment bankers now have put one of the critical steps together to create a model to bypass banks and their expensive capital. Having a platform is one critical step, but […]

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Non Banks using Information Advantages to Finance trade credit

- August 13, 2014 4:48 AM | Categories: ,

PatentedAlgorithms2 Networks contain valuable data on the performance history of buyers and their suppliers. Today, most of the financing is done on one event, an approved invoice. Tomorrow, financing could be done based on many events – purchase order, materials ordered, factory about to ship, etc. Funds could be released at certain triggers. Far-fetched? Maybe. But that is where we are moving with many B2B and Supplier Networks that are using the data contained in their network to enable funders to lend money. By using performance history data along with visibility and underwriting models, the market for “information advantaged” finance is […]

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Is trade credit insurance always good value?

- August 12, 2014 4:02 AM | Categories:

This is always a good question for any company to ask with a critical mass of diverse pools of receivables. Of course the answer will depend on what jurisdiction you live in, but it appears we now have more credit risk mitigation choices for both multinational and mid-market companies than ever before. The best thing you can do is find yourself a broker that can educate and orient you to these myriad of changes and then you can make an informed decision. As they say, date your insurer, marry your broker. The best service you can do for your own […]

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