It's Prime(Revenue) Time for New Payables Options

I was extremely happy to see this recent press release from PrimeRevenue announcing that its platform -- which allows procurement / A/P organizations to essentially "securitize" payables and suppliers to securitize receivables, letting banks in on the action -- is gaining serious traction. According to the news, PrimeRevenue has "processed over $30 billion in payments from 40 buyer organizations. More than half were made in the twelve months ending May 2008. By year-end 2008, existing and new programs are planned to bring an additional $25 billion in payments and financing for the year." Is the economy and credit crisis contributing the volume and interest? You betcha. "Since the 'credit crunch' in August 2007, supplier-initiated receivables sold via the PrimeRevenue solution grew approximately 40%. Several thousand supplier accounts are live and trading in 22 countries worldwide, receiving payments in 9 currencies. PrimeRevenue's supplier population doubled in the twelve months ending May 2008."

Translation: suppliers need (and want) cash faster in today's market. And they're willing to give up double or triple digit basis points to get it. But perhaps more important, PrimeRevenue is proving out the need for EIPP (electronic invoice payment presentment) solutions that go beyond simple invoice automation and disbursement management. This is good news for banks like Chase and Citi -- not to mention financial services conglomerates like American Express -- who are also invested in the area, either through acquisitions or partnerships. Methinks many other banks will be playing catch-up as they get into the game as well which is good news for PrimeRevenue and Ariba/Orbian.

- Jason Busch

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