Dubai test case for new Pcard solution

Government of Dubai, Citibank, Visa, and Invapay partner to offer Smart Finance to ease supplier onboarding and provide early pay access.

Good for the Government of Dubai. They have partnered with Citibank, Visa, and Invapay to offer Smart Finance, a way to enable small suppliers to get paid early, even if it is by pcard.

Pcards are notorious for having poor supplier take up, first because of the rich invoice discounts, but also because of the fact suppliers must sign up with their customer’s program, and could be doing multiple pcard programs with their customers. In addition, if you are not currently accepting pcards, you need to work with your financial institution to process pcard payments and to send the supplier a pcard remittance advice.  That's not something banks make intuitively easy.

In addition to these challenges, Pcards are also known for serving the buyers interest well for non purchase order requisitions with fat rebates that make treasury (or the division responsible) salivate.

The solution offered by Citi’s Corporate Purchasing Card (CPC) backed by VISA® and Invapay’s Master Merchant services is looking to alleviate some of these supplier challenges, particularly the onboarding costs. Small suppliers may not accept credit cards (and by the way this is one of Paypals biggest value propositions). In Dubai’s initiative, Invapay will act as the Master Merchant or Paypal equivalent and they actually process the card transactions in their technology and pay suppliers through their automated back end.

In essence, they are providing the Government of Dubai through their ePayment APIs, the ability to capture higher rebates on the pcard programs because suppliers do not have to be credit card enabled. The hope is to have 9,000 local suppliers, mostly small and medium businesses (SMEs), benefit from the program.

Citi is looking to expand the Smart Finance type of solution to other cities around the world. Atiq Ur Rehman, Citi’s Chief Executive Officer for the Middle East and North Africa commented “We are very focused on the 150 cities around the world that we believe will shape the future of the global economy in years to come and Dubai is an integral part of this strategy,’’  The Dubai solution is one of Citibank’s pilot entities to pioneer this payment solution.

This certainly excites Invapay and Visa as well, as they see these kinds of initiatives driving pcard usage. Invapay recently signed an agreement to work with Visa to help Asia-Pacific businesses overcome challenges in accounts payable and receivables management usually caused by a lack of process automation, whereby Visa’s new data and invoice management platform in the region use Invapay as the payment and reconciliation engine.

Chart below courtesy of Invapay

Invapay New World Old World Diagram

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