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Barclaycard attempts to redefine supply chain payments for businesses

Barclaycard has launched a new service for corporates, Barclaycard Payment Intelligence (BPI). The service combines hundreds of accounts payable (AP) data points with internal and third-party data. This is designed to help customers develop the right payment solutions for their various suppliers far faster than it would take to do manually.

The technology helps businesses catalogue their suppliers based on the number and value of transactions as well as their size, location, industry and whether early payment is likely to generate savings, to create a comprehensive overview of the entire supplier framework. For companies with thousands of suppliers - big and small - on their books, this should offer a time and cost saving for decision makers.

Insights and actions

Specifically, BPI allows business buyers to understand their current supplier payments profile, analysed and presented in different formats. It also covers their suppliers’ payments preferences and capabilities - such as being able, and willing, to accept card payments. The data will provide insight into how critical, as a buyer, their business is to each supplier in their chain. The service will also suggest the best timeframe for paying a supplier to ensure early payment discounts are taken advantage of, and to protect the supplier’s cashflow.

A set of algorithms created by Barclaycard Payments then translates these insights into a bespoke payments strategy, which is designed to allow customers to do the following:

Combat late payments

The Federation of Small Businesses estimates that 50,000 small and medium sized businesses close each year due to late payments. Combatting this builds stronger relationships with critical suppliers and often results in better deals for the customer.

Save time and resource

Initial findings from Barclaycard Payment Intelligence research testing show that, on average, 20 per cent of supplier costs are made up of low-value, one-off transactions too often settled inefficiently via invoice. Automating these payments through a card solution can save an organisation valuable time and resource.

Generate savings

Barclaycard research shows that UK CFOs are missing out on £6.7bn in savings by not taking advantage of early payment discounts. Barclaycard Payments Intelligence enables businesses to fully capitalise on early payment discounts and generate a better return on capital employed.

“Clunky and complex supplier payments processes mean that businesses of all sizes are losing out on time and money," commented Anna Porra, Commercial Strategy Director for Barclaycard. “Barclaycard has looked to make use payments data to identify opportunities for improvements across the procure to pay process and drive actionable insights for both buyers and suppliers. Barclaycard Payment Intelligence is a new suite of tools that harness state-of-the-art data analytics and financial modelling to devise tailored, actionable solutions for our customers. This approach not only brings tangible benefits to the bottom line, but it also helps to strengthen relationships between buyers and suppliers. As we navigate our way through this difficult period, safeguarding supply chains is a key way of future-proofing operations, and it’s part of Barclaycard’s mission to help businesses realise these benefits.”

Safeguarding supply chains

As the Barclaycard news makes clear, supply chains are under extreme stress during the COVID-19. Two stories this week have highlighted the efforts being made to support supply chains across the world.

Firstly, Tradeshift launched a ZAR25bn (approximately US$1.5bn) COVID-19 Instant Supplier payment scheme for businesses in South Africa and selected African markets in partnership with Raindew Trade, a trade and supply chain financing platform providing supply chain solutions to corporations in Africa and other selected markets.

Launched off the back of the recent roll-out of Tradeshift Engage and a similar US$55bn Instant Supplier Payment programme with Denmark's Export Credit Agency, the initiative is designed to address the cash flow and liquidity challenges in African supply chains. 

Using the Tradeshift platform, the Instant Supplier Payment scheme will inject liquidity into the market and accelerate digitisation in supply chains at scale, building a digital collaboration between suppliers, buyers, and financing institutions. Through upfront and early payments to suppliers, corporate buyers can request payments in advance to pre-qualified suppliers to be made on their behalf, with credit payment terms of 21 to 360 days. Additionally, the Instant Supplier Payment enables to export and import financing solutions for cross-border trades, allowing exporters to get paid upfront or on the same day of their export shipment. 

Secondly, PrimeRevenue and The Co-operative Group announced a supply chain finance partnership. Barclays Bank, who introduced The Co-op to PrimeRevenue, will be providing funding on the supply chain finance programme, followed by other financial institutions as the programme grows.

Fuelled by a highly challenging business climate heightened by the pandemic, the Co-op aims to offer suppliers a simple method of early payment to help with their cash flow without having a detrimental impact to Co-op's own cash position. This is particularly relevant in the current environment where the old adage "cash is king" has never been truer.

As the UK continues to experience economic volatility as a result of the global health crisis, Co-op is committed to supporting and protecting the supply chain. This partnership is designed to allow it to provide a much wider range of its suppliers with an early payment option than previously, many of which are already familiar with PrimeRevenue's supply chain finance platform.

"We've used supply chain finance in the past and were aware of its potential to improve cash flow for both Co-op and our suppliers, but we wanted our suppliers to have a more accessible and seamless experience," said Simon Nuttall, head of Tax, Treasury & Insurance at the Co-op. "What drew us to PrimeRevenue was the company's demonstrated success in achieving a programme's full potential for both customers and suppliers. A large portion of our Phase 1 targeted suppliers were already utilising the platform through other commercial relationships – and we were confident PrimeRevenue's comprehensive approach would allow us to support an even broader range of our supply base with early payment options."

Technical implementation of the supply chain finance programme has been successfully completed and the first wave of suppliers are transitioned to the PrimeRevenue platform. More than 60 suppliers are expected to be onboarded in Phase 1 with significantly more to follow.

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