Populous Mixes Blockchain With Invoice Finance

There’s a sea of ​​new FinTechs looking to challenge traditional banks in the UK, and there’s another sea of ​​FinTechs exploring how to take blockchain from a hypothetical disruptor to the real world. A new company, populousseeks to be a strait that connects these two seas.

The British firm entered the world Last week, announcing plans to officially launch in a few months. Populous aims to use blockchain to disrupt the SME finance space, specifically the invoice finance industry, by using distributed ledger technology to generate and transmit smart contracts and create a digital marketplace through which small companies can finance their unpaid invoices.

In an interview with PYMNTS, Steve Williams, Founder and CEO of Populous, said his company was “one of the first, if not the first, smart contract-based platforms with a real business plan that s ‘connect to it’. in articles and experiences that explore blockchain. He added that not only is Populous looking to introduce a real-world use case for blockchain-based smart contracts, but the company will also aim to play a role in the financial services market.

Williams noted that he has no concerns related to the introduction of a working blockchain solution and that the only concerns he and his team may have would be related to “excitement”, he said. he says, of the actual launch of the business, scheduled for next month.

It’s a bold move given analysts’ discussions of whether blockchain can actually disrupt the financial services market, as many have speculated.

But, according to some research, it may be time.

For example, as shown in a recent survey of government leaders from 16 countries, 14% of those leaders plan to dive directly into blockchain in the coming year, and that includes in the area of ​​contract management. .

“When assets are recorded or transactions are recorded on blockchains, the quest for transparency and the right to privacy should not be in conflict,” concluded IBM’s IBV research on the potential of blockchain. “On blockchains, data can be shared widely, transparently and, if necessary, anonymously.”

Again, however, there is a difference between researching, developing and trusting blockchain technology and actually using it in the real world. For Populous’ Williams, the lack of working blockchain solutions from banks so far is something to consider.

“I agree that the big banks are far from adopting the technology,” he said. “There has been a lot of hype and misunderstanding about what blockchain is and where its use case exists.”

But the executive added that, for the realm of smart contracts and bill financing, blockchain is ready.

“For our purpose,” he continued, “it’s mature enough because it just further automated one aspect of the entire Populous platform and [is] an ideal partner for the additional automation provided by our scoring engine. It’s definitely a massive help and not a hindrance.

In the field of financing invoices, the difficulties encountered by SMEs are already numerous. Late payments have become one of the biggest problems in B2B payments in the UK, and as Williams explained, regulations have struggled to make a real dent in the problem.

“It’s up to the government to overhaul public services, but retail is so much in demand to undermine,” he said. “For example, Walmart’s model is to pay [suppliers] once the gaffes are actually sold, and that pattern of competition – or anti-competitive practice, depending on how and who is affected – has found its way to the main street.

In other words, regulation cannot fight B2B late payments alone; there needs to be a complete overhaul of corporate business models, Williams explained, as well as “a different incentive structure or an acceptance that this is the norm and creating opportunities at the individual level to find other forms of cash flows that enable growth.”

This is where invoice financing comes in. If small suppliers are at the point where they are ready or have to accept that late payments are part of their realities, there must be new ways for these SMEs to access financing. Alternative finance in the UK has exploded in recent years, with many platforms identifying this very problem of late supplier payments, compounded by banks’ reluctance to lend to small businesses, as having created a critical need in the market.

Williams added that today’s SMEs need transparency, less paperwork and faster settlement when accessing finance. And for Williams and Populous, the way to automate, increase transparency and speed up the process is to integrate blockchain into the solution. As Populous prepares to exit beta and open its bill financing solution to the masses, the company may need to convince borrowers who are tired or unfamiliar with the blockchain a bit, but its CEO is confident that Populous will a serious competitor.

“We prefer to embrace change and spend savings on reducing risk,” he said, “and providing better rates for borrowers.”



On: Forty-two percent of US consumers are more likely to open accounts with financial institutions that facilitate automatic sharing of their bank details upon sign-up. The PYMNTS study Account opening and loan management in the digital environmentsurveyed 2,300 consumers to explore how FIs can leverage open banking to engage customers and create a better account opening experience.

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