This brief announcement is posted in the Free Press Journal and announces a partnership between Worldline, the UK-based mature payments fintech, and 4thWave, a Canadian startup specializing in supply chain and collections capabilities. The announcement indicates that the initial launch will be for businesses in India and southeast Asia (we suppose across ASEAN but perhaps starting in one or two markets). Typically in that area of the world (and for this type of B2B collaboration) one would think that the SME space is the initial goal, but the posting indicates that large corporates are in play as well.
Through this partnership, Worldline will launch a digital platform that brings together lenders and businesses to facilitate Supply Chain Financing, Collections and Payments on a single platform. The platform will facilitate businesses to access affordable finance on one hand and helps to optimize B2B payments across multiple payment rails on the other, it said in an official statement…
The offering will address a diverse range of working capital financing use cases for MSMEs and large corporates alike, across various industry segments. The partnership will leverage the extensive merchant and banking partner network of Worldline India, the statement added.’
We have been touting the benefits of SCF as one of the additional arrows in the quiver for businesses (or business counterparties) who struggle with working capital effectiveness. This is especially troubling in the pandemic era with supply chain hurdles. So a prerequisite for these firms to survive and thrive is to have digital processes, which then allow for more options in the cash cycle when seeking cash flow alternatives. SCF is a key alternative since it can be facilitated more easily through growing marketplaces and digital information that allows for instantaneous analysis and decisioning on short term financing. More to come in this space.
‘The COVID-19 pandemic impacted most businesses, and the traditional lending models limited easy access to finance. The credit gap in India alone stands at over Rs20 trillion despite the contemporaneous extended credit environment. A survey conducted in 2020 highlighted that 9 in 10 respondents in India are concerned over a deterioration of their working capital cycle and short-term financing flexibility…
While the region is witnessing a lot of innovation in B2C payments, large and costly gaps remain in the B2B segment, with most of the businesses reporting high Accounts Payable (AP) processing costs as a major challenge with traditional payment methods.’
Overview by Steve Murphy, Director, Commercial and Enterprise Payments Advisory Service at Mercator Advisory Group