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Can fintechs enable you to enter financial services business too?

Managing the financial transactions and flows in supply chains has been a focus of logistics companies, particular the global groups, e.g. UPS Capital, for many years. According to Logistics Management, they already provide:

  • “risk mitigation in the form of supply chain insurance;
  • cash flow or leveraging the goods in the supply chain and helping businesses improve their cash flow; and
  • payment solutions and how to shorten the cash conversion cycle.”
  • they cover all aspects of the order-to-cash cycle in the supply chain.

So it is no surprise that yesterday, they announced a collaboration with cross-border payments company Payoneer to provide international payment services for small and medium sized businesses to help them remove complexity and cut costs. 

Integrated services

Payoneer provides UPS with buyers and sellers in more than 200 countries and 150 currencies, and have a secure digital platform for moving payments across those borders. But this is not enough on its own, UPS still need to integrate all three parts of the supply chain activities:

  1. Shipper consignee processing
  2. Payment
  3. Transportation.

into a seamless transaction. This overcomes the reluctance of small businesses to grow internationally who, Logistics Management report, “Don’t know how to navigate that as a buyer or a seller in terms of different currencies and languages, as well as how to vet new customers and create trust between the two businesses.” 

Developing new financial services

New financial services that gain traction:

  • Provide seamless or frictionless transactions / processing
  • Include the whole end-to-end transaction rather than just individual parts such as payment or financing
  • Focus on under-served niches in the B2C and B2B space.

So, in your company or group’s business, first map out the whole end-to-end process(s) and then ask:

  • Where in the entire transaction flow are the bottlenecks?
  • How can these be removed/reduced?
  • How could fintechs help stitch the whole process together more effectively?

CTMfile take: We suspect that fintechs can do much, much more than you’d expect. They are a hidden resource.

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This item appears in the following sections:
Dynamic Discounting
Financing Short-Medium Term Deficits
International Bill Payments
International Payments

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