Tradeshift Pay overview: Connectivity as a bridge to finance

Back in May 2018, Tradeshift announced Tradeshift Pay, and proclaimed it was the industry’s first end-to-end cloud platform for supply chain payments and finance, including blockchain-based financing. At that time, very few source-to-pay vendors had any type of payment offering. What those solutions provided was an approved payment request, which involved matching the invoice with documents (purchase orders, packing slips, etc.) and changing the payment status to approved for payment, or “OK-to-pay.” Once the approved payment reached its scheduled pay date, based on the specified payment terms, it was paid.

Some of the e-procurement vendors were developing payment punchout capabilities for catalog purchases, using a virtual card to pay suppliers. Almost no one had any money transmitter license, bulk payment capabilities, cross-border payments, digital wallets or other payment capabilities.

Now in 2020, the source-to-pay world has recognized that the payment gap needs to be closed. Offering capabilities around sourcing, e-procurement, AP automation, spend analytics and other important modules without providing the payment capabilities was not truly a source-to-pay, invoice-to-pay or procure-to-pay solution.

The question was how to do this. S2P, I2P, P2P and AP automation vendors (like Coupa, Tipalti, SAP Ariba) have taken different roadmaps.

In Tradeshift Pay’s case, the focus is providing a digital solution for buyer payments while providing sellers on the network early finance opportunities. The prime objective of the Tradeshift Cash solution is to help sellers get paid earlier for their invoices to address supply chain liquidity. Tradeshift built a solution that can get its network suppliers paid much faster — from an average of 30 to 45 days in the European Union and U.S. down to a couple of days.

Tradeshift Pay is built around invoice automation to get the invoice ready to be paid. But through the integration with Tradeshift Cash, sellers can now be paid before the invoice has been approved. Tradeshift has built a receivable finance solution that ties in their network transactions with their network and third -party data to provide receivables finance.

Let’s take a closer look at how Tradeshift Pay works.