Paystand launches AR-Centric dynamic discounting application
By Edlyn Cardoza
Paystand, a leader in blockchain-enabled B2B payments, recently launched a dynamic discounting application designed for seller accounts receivable (AR) teams and powered by Ethereum smart contracts.
This is the first solution to enable seller AR teams to offer buyer accounts payable (AP) teams dynamic early payment discounts. Early payment discounts incentivise buyers to pay sooner and give Paystand AR teams earlier access to cash, reducing days sales outstanding (DSO). More than 400,000 buyer AP teams using the Paystand payments network can start reaping the benefits of early pay discounts and faster payment using blockchain-powered smart contracts technology.
“Early access to cash is key to business survival in today’s recessionary and inflationary environment,” said Jeremy Almond, CEO and Co-Founder of Paystand. “While early payment terms (e.g. 2/10, net 30) have always been buried in paper and electronic B2B contracts as generalised static terms, seller AR teams have not been able to take advantage of these to speed their cash flow. Paystand is the first company to use blockchain as a technology innovation that will reshape the whole industry.”
“Paystand’s first-of-a-kind dynamic discounting application puts the power in the hands of AR, by allowing them to initiate dynamic discount offers that are auto-executed via smart contracts, with digital funds transfer over a verifiable, blockchain-based network,” Almond continued. “With a zero transaction fees model, AP teams don’t have to split their cash discounts with a third party. Optimising cash cycles for both sellers and buyers is key to Paystand’s mission of transforming business payments to be #Cashless, #Feeless, #Instant, #Self-driving, and #Open and Programmable.”
Many industries and buyers are known as slow to pay, and until now, AR departments have been at the mercy of buyers, with little recourse in accelerating payment to improve cash flow. To date, dynamic discounting systems have been designed for large AP customers who have significant leverage with their sellers to offer static, take it or leave it discount rates to sellers. Overreliance on buyer-side AP, legal, treasury and third-party AP platforms and factors to initiate and finalise commercial arrangements have caused friction and delays, precluding the vast majority of suppliers from benefiting from faster payments.
With its AR-centric, dynamic discounting solution, Paystand has turned traditional dynamic discounting on its head. Through this dynamic discounting solution, suppliers control the terms of discounts, allowing them far more flexible terms and time-sensitive discounts anytime between the customer invoice creation date and the due date.
According to Bob Cohen, Senior Vice President of Research at Ardent Partners, a leading P2P industry research firm, “While Dynamic Discounting solutions are typically sold to buying organisations, the return on investment in these solutions is directly linked to the level of internal usage and supplier participation. To create an incentive for suppliers to link to a Dynamic Discounting platform, the solutions should reflect supplier requirements and create value for participating suppliers.”
AR departments are recognising dynamic discounting as a significant avenue to improve cash flow. Offering those discounts dynamically via the blockchain, with no financial intermediary or fee payment needed to plug the gap, means that suppliers can harness the flexibility of an optimised, graduated discount versus having no discount option at all or providing them through a cumbersome, manual process.
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