Invoice-CHAIN, a blockchain-powered global marketplace for the multi-trillion dollar invoice discounting industry has been launched by Primechain Technologies.
Invoice discounting (also known as Factoring and Supply Chain Finance) enables suppliers to sell their invoices at a discount to investors (Banks, Financial Institutions). This enables suppliers to get faster access to money they are owed and enables buyers to get more time to pay.
Instead of relying on the creditworthiness of suppliers (usually smaller businesses), the investors deal with buyers (usually larger businesses). This can lower financing costs, optimize working capital and improve business efficiency.
Invoice-CHAIN is available in two modes – web application and API service. The web application is the simplest way of using Invoice-CHAIN and requires no integration or additional hardware / software. The API service is suitable for Banks and Financial Institutions and requires additional hardware, software, and integration with existing / legacy systems.
The API service will be operated from Infibeam Avenues’s state-of-the-art integrated Blockchain Data Center running primarily on IBM’s Linux ONE servers. These servers were chosen because of their encryption capabilities, speed, and scalability.
Participants can setup Invoice-CHAIN nodes on cloud (Microsoft Azure Cloud Computing Platform) or on-premise (using Dell PowerEdge servers). Invoice-CHAIN is part of the Money Marketplace (M2 pronounced M-square) being setup by Primechain. Money Marketplace also includes G-CHAIN (a global marketplace for Government Securities) and Debt-CHAIN (a global marketplace for Non-Government Bonds and other Debt Instruments).
Problems in the current system of invoice discounting include the following:
- Investors deal with the suppliers / vendors (usually smaller businesses). This creates a higher risk of default.
- There are thousands of factors and platforms with low availability of quality invoices.
- Most existing factors and platforms operate at a local / country level.
- Multiple KYC platforms operating in silos.
- Price discovery is not possible.
- Absence of credible credit rating.
Investors deal directly with buyers (large and highly credible businesses). This creates a very low risk of default.
Benefits to vendors / suppliers (payees). This also increases cash flow in hours, and speeds up the working capital cycle.
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