B2B Payments Content

Exploring the supply chain finance and P2P implications based on Greensill’s restructuring

Earlier today, the WSJ reported that Greensill Capital could face restructuring or liquidation. For those not involved in the esoteric world of trade financing (and supply chain finance, or “SCF,” in particular), it can be difficult to understand the structures that Greensill and its peers are involved with. So let’s first define supply chain finance (and offshoots of it) for those which are just coming up to speed before exploring the supply chain finance and procure-to-pay (P2P) implications of Greensill’s potential restructuring.

PayPal’s flywheel forces merchants’ hands for B2B, B2C payments

paypal

With its monstrous success, PayPal has developed a network effect with excessive fees and policy practices, despite increasing competition in the cross-border and digital wallet space — with competitors like Veem (see coverage here), XTRM (see coverage here) or TransferWise.

Read about four areas of concern.

Implications of the Wirecard fraud case on B2B payments

I speak to many executives in the B2B payment industry, and the conversation usually turns to the Wirecard fraud case at some point. Typically, the first question is: How could more than $2 billion go missing and the business run for years before it goes bust?

Wirecard was the darling German fintech. What went wrong?

The state of dynamic discounting in B2B payments

There is no argument that the demand for early payment on invoices is as strong as ever — that is to say, if you have invoices to generate. In the coronavirus era, many businesses have lost significant revenue. For example, businesses serving the U.S. hotel & food-services industry have shed 40% of jobs from January to May, and received only 8% of the government’s small business loans.

Many see early pay via dynamic discounting as a win-win — help suppliers get cash, and buyers manage cash at much better yields than alternatives.

For suppliers, it’s easy to present the advantages to make a yes/no decision — get paid early with a known discount, predictable cash flow and don’t worry about onboarding hurdles that most supply chain finance programs are burdened with.

But let’s explore the supply-side for a second. There are a number of factors at play in a COVID-19 world, some favorable and some not-so-favorable, that make one pause for consideration.