From cards to contactless, mobile, online and wearables, consumers have never had so many ways to pay. Whether swiping or taping, one thing is for sure, the process has become easier, more efficient and secure. And it’s what consumers want. In just 12 months, the number of mobile payments jumped by 365% in 2017, according to Barclaycard data. It’s clear that when consumers understand the benefits of technological advance, they become contactless converts.
While merchants have had to adapt quickly to changing customer expectations, things have been slower in the business-to-business (B2B) space. More than two decades into the internet age, only one in four transactions in the supply chain are digitised. Selling or finding business services can mean flicking through a catalogue, making phone calls, invoicing on paper and dealing with clunky and antiquated payments systems. The result: more than $4 trillion in lost sales and unneeded costs each year.
Outdated procurement processes also mean payments can be slow. In addition, because many small and medium-sized enterprises lack access to invoice or purchase-order financing, nearly half of all SMEs experiences cash-flow or late-payment difficulties at some point during the year with half of SMEs in the supply chain ceasing to exist within 5 years
Digitising the supply chain
Each year, Barclays works with a number of innovative start-ups during its Accelerator programme powered by TechStars. The 13-week journey gives some of the world’s most cutting-edge fintechs access to Barclays’ 328 years of financial expertise. It’s a collaborative process where brilliant ideas can become problem-solving innovations with mass market appeal.
The company that Barclaycard Payment Solutions sponsored during the latest programme is Silicon Valley B2B marketplace provider Crowdz. First and foremost, Crowdz’s online marketplace connects businesses seamlessly and digitally, moving the entire procurement process online. Their solution makes it much easier to find suppliers and sell to other businesses. Documents are digitised as well, meaning transactions that used to take months can happen in a number of milliseconds. It’s more of a click of the mouse, than a journey round the houses.
Crowdz also facilitates the selling of both invoices and purchase orders, allowing smaller businesses to get paid earlier and keep cash flowing, at the best rates possible. This online invoice exchange also gives investors the additional invoice inventory.
Finally, transactions also take place over a tamper-proof Ethereum blockchain meaning they are secure.
Making it happen
Now that the 2018 Accelerator has finished, Barclaycard Payment Solutions is continuing to collaborate with Crowdz on a proof of concept to turn their proposition into a fully-functioning ecosystem. Being a market-leader in digital payments, we will look to integrate our payment gateway into Crowdz’s platform. Providing funding and support, the initial plan is full systematic integration to create a product that works, and works well.
Barclaycard Payment Solutions will also give a small group of clients access to the marketplace to measure its impact on their business and also refine the platform’s capability to suit real-world needs. In the first instance, retailers in the office or home furnishing sectors will be given the chance to sample the solution. The proof of concept is expected to take around 24 weeks with measurements taken of the buyer and seller customer experience, viability as a value-added product and the quality of the commercial model. If successful at this stage, a trial in the commercial space is the next likely step.
We’re good at this
We have form for making these partnerships work. We’re still collaborating with previous Accelerator alumni Flux on their digital receipt solution. Cutting the need for paper receipts, Flux’s platform stores digital receipts in your banking app and even has a ‘loyalty’ function, meaning no more fumbling round to get your coffee card stamped.
Following a successful proof of concept with a Flux, a full commercial pilot is now taking place with food outlet EAT and there are a number of other retailers lined up and waiting to road test the product.
We understand that the fintech landscape is ever-changing and that two heads are better than one. Collaborating with some of the most cutting edge fintechs allows us to bring 328 years’ of financial expertise and apply that know-how to bring problem-solving, game-changing solutions to market that really make a difference for customers and clients. Our proof of concept project with Crowdz demonstrates a commitment to ensuring products are fit-for-purpose, making digital interactions faster, more efficient and more secure.
Ed Black, Director of Innovation & Product said:
“Recent innovation in the consumer payments area has not been enjoyed in the business-to-business payments market. This is largely due to cumbersome, time-consuming and expensive processes on legacy systems making it a very complex environment to improve. Working with Crowdz we are pushing the boundaries to offer a state-of-the-art, digital solution for B2B payments that will enable everybody in the supply to chain to thrive.”
Nick Kerigan, MD, Future Payments said:
“This is about two teams, Crowdz and Barclaycard Payment Solutions working together, bringing innovation expertise and product knowledge. The B2B payments space is a huge potential area of growth and this proof of concept is about learning the requirements of operating successfully in this space.”
Payson Johnson, Crowdz CEO said:
“We have been deeply honoured to have participated in such an exclusive and high-powered accelerator programme.
“Barclays is the world's pre-eminent innovator in payments and financial solutions, and our ability to interact and work with truly distinguished mentors from Barclays in general and from Barclaycard Payment Solutions in particular has been amazingly beneficial in helping Crowdz to prepare for the launch of our blockchain-based business-commerce platform later this summer.
“We look forward to continuing to work with the team at Barclaycard Payment Solutions in making our payments platform the standard in global business commerce over the years and decades ahead."
The fintech landscape is filled with potentially market-leading products that need expertise to get off the ground. The Barclaycard Accelerator powered by TechStars is just one programme taking place at Rise. Rise is Barclays open innovation programme with seven locations globally from London to Tel Aviv, New York to Mumbai. Find out more about Rise and innovation within Barclays here.