Trust as a solution for cashflow
Two in five invoices in the UK are paid late, and it’s getting worse. Late payments have been an ongoing issue in B2B trade. With 25 million companies in Europe and 86% of them counting less than 10 employees, the lack of cashflow can be disastrous.
Although late payments – and lack of capital as a result – are recognised to be one of the major causes of SMEs failure, especially after the recent shortage of lending to Britain’s small businesses, a permanent and effective solution is yet to be implemented.
An innovative system comes from UK start-up StonePay in the process of launching a new community-led app aimed at building a B2B community based on trust. With reputation being critical when starting new business relationships, this app uses a simple and intuitive approach where each company manages their Reputation Score based on previous successful transactions, turning confirmed payment history into reputation points. StonePay captures data from the two parties directly involved in the transaction, confirming each other’s performance. No third parties involved. This allows to bypass extended communication chains which result in further delays.
Companies can build their reputation rating and their trust profile. Each business’ reputation report can be shared to guarantee the company’s trustworthiness, or to obtain
better credit conditions and improved business terms, resulting in a smoother process and improved workflow of the finance department. A precious tool for SMEs looking to maintain steady cashflow and avoid unreliable payers.
The pandemic weighed heavily on SMEs finances, with 80% of them saying their revenues have declined in the last two years, putting even more pressure on the importance of efficient cashflow. StonePay promises to give the power back to businesses and trading community, shifting from an “external control approach” to an “internal reputational approach” with trust at the core of each transaction.
In just two weeks StonePay reached 100% of their crowd-funding target, a next round of funding is planned for December, followed by the official launch of the app.
Filippo Mazzei CEO and Founder of StonePay says “There is a huge need for B2B businesses across the globe to be able to trust each other and to control their business reputation without having to rely on traditional methods that cost money and cause delays in operations. Our aim is to eradicate late payments, limit risk, and offer the good payers the benefits they deserve!”.
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