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Industry roundup: 19 October

Mastercard joins with Previse to speed cross-border payments

Mastercard is collaborating with UK artificial intelligence (AI) fintech Previse on the integration of Mastercard Cross-Border Services – a global push payments platform for sending funds seamlessly and securely – into Previse’s InstantPay platform.

InstantPay utilises the latest advances in machine learning, to review invoices and identify those that are susceptible for rejection, so the remainder can be paid on the day of receipt. With Mastercard’s Cross-Border Services integration, companies using InstantPay can send digital payments safely via bank accounts and digital wallets to suppliers in more than 100 markets globally. Businesses can also access real-time exchange rates for local currency and reduce the need for additional documents and manual processes. 

A press release announcing the team-up noted that that In today’s environment, cash flow is critical - particularly for small and medium-sized businesses (SMBs). Over one third of SMBs in North America report facing cash flow issues due to late payments and slow processing times for cash and checks. Globally, many businesses also lack streamlined ways to receive payments in their local currency when dealing with customers in multiple markets. This forces them to borrow money at expensive rates to support cash flow, while they wait for payment on outstanding invoices.

“Delayed payments have always been a challenge for businesses and the pandemic only exacerbated this pain point,” said Ron Shultz, executive vice president, New Payments Flows, North America at Mastercard. “With Mastercard Cross-Border Services, businesses can expect to receive funds quickly, directly and securely. Digital B2B payment innovations like the ones being driven by Mastercard and Previse are helping suppliers gain faster access to funds and freedom from inefficient processes, so they can not only recover today - but thrive tomorrow.”

“Flexible, robust supply chains and steadfast cash flow are essential for businesses to thrive and grow, particularly SMBs,” added Paul Christensen, CEO and Co-Founder of Previse. “The integration of Mastercard Cross-Border Services enables every corporate using InstantPay to effortlessly pay suppliers across the world on day one. It's an innovative solution from Mastercard and Previse, which strengthens global supply chains and is a true win-win for large corporates and SMBs alike as we recover from the pandemic.”

BSE to offer T+1 settlement from January

India’s BSE – formerly the Bombay Stock Exchange – has advised members that it is moving towards optional T+1 (day) trade settlement in the equity cash segment. The bourse is expected to offer the facility from January 3, 2022.

Local reports noted that T+1 settlement will be a major advantage for retail individual investors, who will get money after selling shares one day earlier than they now get in T+2 settlement. Some brokerages like ICICI Securities have started offering same day payment for trades below Rs 1 lakh for select securities.

“Few countries have T+1 settlement,” the reports added. “Most developed markets like Hong Kong, Singapore, Japan and South Korea offer T+2 settlement. Taiwan, which had switched to T+1 settlement, has moved back to T+2 cycle.

“Though this shorter settlement cycle is proving to be a challenge for foreign portfolio investors, who have to also deal with the currency movement in the same time period.”

Market regulator the Securities and Exchange Board of India (Sebi) announced last month that it would permit exchanges to introduce T+1 rolling settlement on an optional basis from January 1, 2022. The Sebi had previously shortened the settlement cycle from T+3 rolling settlement to T+2 back in April 2003.

“Sebi has been receiving request from various stakeholders to further shorten the settlement cycle. Based on discussions with market infrastructure institutions (stock exchanges, clearing corporations and
depositories), it has been to provide flexibility to stock exchanges to offer either T+1 or T+2 settlement cycle,” the regulator said.

DP World trade finance platform targets SMEs

Dubai-based logistics firm DP World has launched Cargoes Finance, a fintech platform covering trade, logistics and inventory finance, which aims to boost support to SME importers and exporters.

Cargoes Finance offers a variety of pre- and post-shipment financing products, as well as extended payment terms, the company says. It also gives financing options for logistics processes, receivables and payables financing, and invoice discounting, and users can boost working capital by using inventory as collateral. 

“Growing businesses can often lack the capital and resources required to drive global expansion, often exacerbated by prohibitive financial requirements and copious documentation,” says Mike Bhaskaran, DP World’s chief operating officer for logistics and technology. 

“We designed Cargoes Finance to mitigate these constraints, unlocking new opportunities for SMEs to compete and reach a global market.” 

DP World’s senior executive officer Sinan Orczan, who joined the firm in August and was previously with Maersk Trade Finance added that companies are already reaching “more international customers that were previously cost-prohibitive to access. 

“Globally, small-to-medium-sized businesses handle 50% of trade, yet only a few have access to funding with little chance of it being approved.”

DP World says Cargoes Finance requires “minimal documentation” and involves a simple online application process, with approval decisions made quickly using technology. The platform is provided by DP World Financial Services Limited, a Dubai-regulated entity incorporated in May 2021. 

Alinda to launch £350m infrastructure fund

US private equity house Alinda Capital Partners LLC has confirmed plans to float on the London Stock Exchange in late November, raising up to £350m (US$480.5m) through an offer and subscription.

Alinda says it has identified several infrastructure investment opportunities over key three areas – the transport and logistics infrastructure; utility-related, and digital infrastructure sectors. Over the first three months after admission, it expects to deploy around £200m, and increase the size of its deployment over the following years, to reach around £500m to £600m.

The fund, Alinda Capital Infrastructure Investments, will target medium-sized businesses around the world which support the three sectors.

Alinda added that it expects to place shares at an issue price of 100 pence each, with shares being admitted to the market in late November. It also expects to publish a prospectus in due course for a placing program, allowing it to issue a further 650m shares. Peel Hunt LLP is acting as sole financial advisor, and joint bookrunner and joint corporate broker with Numis Securities.

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