With the first stages of BidPay®’s technology development complete, company CEO, Tony Furman, announced earlier this week that BidPay®, Inc. has begun to license its technology and is in late-stage discussion with two prospective clients BidPay® expects will begin auctioning accounts payable by year end.
BidPay®, Inc. is an accounts payable auction technology platform that places supply chain buyers (large retailers and manufacturers, primarily) in better control of how their suppliers are paid. By giving suppliers the right to “bid” discounts in order to obtain immediate payment on approved invoices, BidPay® creates a spot liquidity marketplace for suppliers of the world’s leading companies .
“BidPay® is unable to divulge the identities of the companies with which it is in discussion until contracts are finalized; however, we plan to make a formal announcement early in 2015, naming our first two clients”, explained Furman. With the signing of its first two clients, BidPay® is capable of placing for auction over $800 million of payables in 2015. BidPay® is projected to place for auction in excess of $.5 trillion of payables annually within its first five full years of operation.
“85% of suppliers state a willingness to occasionally or always accept discounts for faster payment,” explains Furman. BidPay® simply automates the process of suppliers offering (or “bidding”) discounts through its proprietary cloud-based auction portal. Any supplier of any company that licenses BidPay®’s technology is capable of obtaining “payment-on-demand” directly from their customers in exchange for discount offers–typically in the 0.5% to 5.0% range, depending on how many days remain between the auction date and the invoices’ “payment due dates.” Buyers set their own financial objectives for each auction and suppliers bid for a finite amount of funds buyers are willing to make available in each auction to retire their payables early. BidPay runs payable auctions 24-hours in duration every Tuesday at noon Central Time.
Although a few of the world’s largest companies employ models that allow their suppliers to offer discounts for faster payment, they lack the most valuable and proprietary BidPay® features. BidPay®’s auction platform, on which BidPay® holds perpetual exclusive licensing rights, makes it impossible for suppliers to predict the cost of prompt payment. Shortcomings in competing models abound. For example, most prompt-payment-for-discount models are unreliable, do not consistently provide suppliers access to cash when their suppliers’ cash needs are at their greatest , and fail to expand for suppliers, the “discount opportunity window” when those cash needs arise–most typically between the 10th and 50th day following their delivery of goods.
“Our studies show that in order for a buyer-funded prompt-payment system to be of benefit to both the buyer and its supplier, there are only two requirements: First, the buyer must be able and willing to voucher their payables in a more timely manner, so that they may offer a quick-pay option on vouchered (approved) payments within a window of 10 to 15 days from receipt of goods. Secondly, the buyer must have sufficient surplus short-term liquidity or financing capacity to retire trade payables early at a discount on a fairly consistent basis. Either way, BidPay® produces double-digit risk-free annualized returns for buyers, net of their financing costs.
“The most significant shortcoming of other supply chain finance models is that they invariably fail to produce balanced benefits for both buyers and their suppliers,” Furman adds. BidPay® was designed from inception to create a balanced supply chain “supply/demand equilibrium” where both buyers and suppliers voluntarily participate because it produces equally compelling benefits for both parties.
For the 85% of suppliers willing to occasionally or always accept discounts for faster payment, BidPay® is the only supply chain finance technology product on the market that produces efficiencies great enough to deliver faster payment to suppliers while providing double-digit risk free returns to buyers willing to retire their payables early at a market discount rate established within their supplier community.
For information and a video presentation of how BidPay® works, visit bidpayment.com.