Marketplaces are platforms that enable trades to be executed between suppliers and buyers. There are generally two kinds:
Trade finance can add a significant amount of value to the second kind of marketplace. This kind of platform builds loyalty and engagement with its customers; if the platform is effective, customers will keep returning and keep transacting. Key to their success is the amount of value and convenience that is added to the transactions that are executed versus the charges levied by the platform. Most such platforms include:
All of these features are a natural part of the marketplace / platform proposition – but the most significant value that can be added comes through trade finance.
Platforms that integrate trade finance solve many issues for suppliers and their buyers. Every transaction involves a working capital need. The supplier has to spend time and money creating products for shipment, whilst the buyer has to wait for products to arrive and then has to spend time and money converting what he receives into cash within his business. The typical time period for these activities is 6 months in most industries; that is it takes 6 months from a buyer placing a purchase order to when the buyer has received the goods and generated cash from them.
PrimaDollar can add trade finance to any B2B marketplace. Marketplaces specialising in the supply of non-perishable goods can offer payment to exporters at shipment. Marketplaces that involve perishable goods (like food) can offer payment to exporters at delivery. In both cases, buyers can pay later, and PrimaDollar takes the buyer credit risk. Moreover, by integrating our technology, finance can be provided in the name of the marketplace. This is something that we call “Finance-as-a-service” – a new form of white-label arrangement where the marketplace does not have to subordinate its brand and appear as an agent or broker; finance is delivered to clients directly in the name of the marketplace.
Marketplaces are emerging and growing quickly; they will be an important part of the future of global trade. The winners will be the platforms that add the most value to their transacting clients. Adding trade finance is an essential step, and PrimaDollar’s technology is the way to do this.
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One Minute Guide What is it? Export finance helps exporters to offer credit to their buyers. This means that they can offer "ship now, pay later" terms
One minute guide. Who is PrimaDollar? PrimaDollar is a UK-based trade finance platform working with exporters
One minute guide. What is it? Dual factoring is the process of coordinating two factoring companies so that one of the companies