Category Archives: Technology & Platforms

B2B payments boring? Think again as companies attract significant venture capital

Technology that facilitates B2B payments is increasingly attracting venture capital money in many areas:

* Pure product plays that look to take market share away from banks in areas like cross-border payments, check-to-ePayment conversion, virtual account structures to replace the need for a correspondent bank network, etc. * Infrastructure plays, which provide the foreign exchange services, Technology, Operations, Compliance and Risk management to enable banks, fintech and money service brokers to offer services to their client base. * Service providers that build B2B payment applications for banks and corporates. Typical areas of focus include cognitive automation, cloud and blockchain. Banks also want to move on from legacy infrastructure and do it incrementally in quick cycles.

B2B payment companies have raised significant amounts of capital recently, including Currencycloud ($80 million), AvidXchange ($260 million), Tipalti ($76 million, Transferwise ($292 million), Marqueta ($260 million), Ripple ($200 million) and Paystand ($20 million). Of course, Mastercard (AvidXchange) & Visa (Currencycloud) are behind some of these investments, driving B2B card use through the rails.

There are number of reasons why VC money continues to pour in here:

Why Platforms Need to Monetize Their Supplier Ecosystem

Because P2P solutions started giving away supplier portals, cash flow optimizers, analytics, support, etc., they closed a revenue door. Trying to build a sustainable business model when half your ecosystem is not monetized is very challenging, even as P2P platforms add features and functionality. Sure, many platforms are trying to figure out payments, and that is something that scares the bejeebers out of them due to regulations and compliance rules. (Don’t pay that blacklisted vendor or person, or else.) But payments is not a profitable business for platforms, it’s a service.

Oracle Acquires Textura — Tackling Payments and the Financial Supply Chain for Construction and More

Oracle announced Thursday it agreed to acquire Textura, a cloud-based solution for the construction industry with end-to-end capabilities spanning from initial bid estimation and sourcing through to subcontractor management, communication and collaboration, invoicing and payment. The $633 million transaction values Textura at roughly 8X trailing revenue and represents an over 30% premium to the previous day’s close, a stiff price for a product that will complement one of Oracle's existing solution lines.

UNCTAD Calls for Reform to International Monetary System

Tianjin

The United Nations Conference on Trade and Development (UNCTAD) is calling for reforms to the international monetary system, saying the need for government to support long-term development finance on domestic and international levels has “not been met” thus far. Trade Financing Matters believes that alternative financing models based on tech-enabled receivables financing and payables financing offer strong potential to serve developing markets.

Beware “Analyst” Research: Ovum’s Review of the Ariba Network

analyst

There are industry analysts and there are paid mouthpieces.

Unfortunately, many are increasingly falling into the latter category. And as Ariba has begun share top marks with Coupa or fall behind in the traditional analyst rankings by Forrester and Gartner, it has increasingly ramped up its efforts with the latter group.

While I have no idea about the economics of this review by Ovum, which I read in researching some recent posts on the Ariba network and trade financing, what was missing in this report screamed out at me as much as what it included.

E-Invoicing is About Quality at the Source

e-invoicing

I recently revisited a paper I wrote a number of years ago, E-Invoicing Comes of Age - Discovering What's Possible From the Latest Electronic Invoicing / Invoice Automation Capabilities, that covers a number of purchase-to-pay (P2P) fundamentals, including what to prioritize when putting an electronic invoicing program in place. Few of the arguments I make in it are any less relevant today than they were 5 years ago. One of the ideas in the discussion is the importance of addressing quality at the source when it comes to e-invoicing – and putting as much back on the supplier as possible, as well as having an e-invoicing program or supplier network do the heavy lifting with pre-validations before information is directly matched against or integrated with ERP or e-procurement systems.

Should Procurement Organizations Prioritize Invoice Discounting Over Other Trade Financing Approaches?

invoice

Invoice discounting programs that rely on underlying e-invoicing capabilities make perfect sense on paper. But to date, the vast majority of organizations implement e-invoicing programs to meet regulatory requirements or drive operational efficiencies before scaling discounting components of a program. Even those organizations that engage with an e-invoicing provider or supplier network vendor offering discounting capabilities often consider these programs as part of a second phase roll-up rather than an initial priority. There are practical reasons for this, given the relative immaturity of many accounts payable organizations combined with questions that treasury may raise in the process of considering invoice discounting initiatives that are internally funded. But in reality, with the right strategy defined and set in motion, there is no reason not to prioritize invoice discounting as the centerpiece of a buyer-led trade financing program.

ApexPeak on Supply Chain finance Fintech acquisition streak

ApexPeak, a Singapore-based nonbank capital provider, has been acquiring companies that facilitate supply chain finance and SME lending in emerging markets. Its’ most recent acquisition […]

Banks need to make Supply Chain Finance more User Friendly

contingent workforce

There is an argument that banks are not making their SCF programs easy enough to implement.   Paula Da Silva, SEB head of Working Capital, went […]

Trade Financing and P2P Technology: How Can Banks Get Smart on Technology and New Client Solutions?

Technology vendors and procurement organizations often ask us about the steps banks are taking to deliver integrated purchase-to-pay (P2P) and related programs as part of their solution portfolios. The answer is actually a bit depressing: Most banks are doing surprisingly little today, and the programs they do offer in the trade financing area tend to rely loosely on technology at best. In fact, we can count the number of banks and their client-facing organizations with an in-depth knowledge of such solutions on a single hand. The sad part, of course, is that banks have a huge opportunity to participate in the new world of fintech – and have far better relationships to drive the adoption of solutions – not just their initial sale – within their current client base, especially the middle market.

A First Step to Predictive Analytics: Quantifying the Risk of Paying an Invoice on Receipt

Is it possible to quantify the risk of paying an invoice on receipt – before the usual approvals process? Remitia, an upstart in the trade financing and payables market, thinks so. In a blog post, originally published on PaymentEye, Remitia suggests it’s possible to use big data to accurately price the risk associated with paying an invoice on receipt. While pricing of payment risk for unapproved invoices is nothing new, the notion of quantifying and grouping different risks from historical payment and invoice files to determine the probability of whether a submitted invoice will be approved and paid without modification brings the concept into the big data era.

Beyond the Invoice: Ruminations on the Future of Document-Triggered Financing

Late last year, David Gustin penned probably the best white paper on the future of trade financing. In his analysis, David argues that there are 6 specific triggers for potential intermediated or early payment: signed contracts, the issuance of a purchase order (PO), materials ordered by suppliers, shipping status, invoice issuance and invoice approval. From a traditional indirect or even direct materials procurement scenario, these steps make complete sense as potential financing triggers, and they are certainly triggers for payment in the offline factoring world today. But if you open your mind a bit to other potential triggers in different areas and scenarios, the prospects become quite interesting indeed.