Leveraging blockchain technology for faster, safer B2B payments

By Gaia Lamperti

Blockchain is gaining momentum in the B2B payments space, a sector that, while powering the economy, is still dependent on lots of admin time and often threatened by potential data security issues. Leveraging new technologies like blockchain could offer a promising solution to several B2B payment issues thanks to its decentralised, non-mediated approach which facilitates faster and less expensive payments.

Chris Aguas, CEO and Founder of CoreChain, a blockchain-powered company revolutionizing B2B payments and financing for the enterprise, discussed the benefits of leveraging the technology with IBS Intelligence.

“B2B payments here in North America are broken. They’re cumbersome, manual and, believe it or not, 2/3 of them today are still settled on paper checks and in a world where so much business is happening end-to-end electronically and business processes have been disrupted by Covid-19, the fact that so much business in North America is reliant on paper-based manual processes is just an anathema,” Aguas explained. He launched CoreChain in September 2020 with the aim to change precisely this.

“We think that the solution for the future is leveraging blockchain technology, specifically enterprise blockchain technology, that enables us really to do 3 things. One is it enables us to create a new, secure environment, where all of the counterparties to a transaction, such as buyers, suppliers, lenders, and even folks that have to watch the transaction for compliance reasons like auditors and regulators, can all see the same version of the truth at any given time, guaranteed through the cryptographic technology,” he told IBSi.

“The second is that we do see a world coming in the next few years where we use legitimate digital currencies like stablecoins, and building on blockchain platforms will enable us to natively support those types of transactions. And thirdly, essentially, what we’re building is a network of networks, so we partner with channel partners that already have large groups of buyers and suppliers on board, some type of software, platform or marketplace, and we plug them into our network as additional nodes. So, we’re really building a B2B payments network of networks.”

Thanks to these propositions, last month the company raised $1.2 million in pre-seed funding from investors that include Ulu Ventures, Connecticut Innovations, Bloccelerate VC and New Form Capital.  The funds will be used to scale the company, bring on additional channel partners, and continue to build their presence in Northern America.

“Our blockchain stack, along with a whole set of services around that, allow our partners to get into payments and financing without having to build those businesses up by themselves. In that sense we talk about ourselves very much as right for B2B,” Aguas added.

In addition to the move towards digital currencies and CBDC’s, CoreChain’s CEO believes that there are a few more trends the industry should keep an eye out for. “B2B payments fraud is actually the fastest-growing category of white-collar crime in the US. According to the FBI, almost $2 billion in fraud losses in 2020. So, we see the emergence of a variety of identity management and identity protection services. Also, there’s the move towards decentralized finance. So, we do see a world where for some of our lending activities, we’ll actually be able to source our capital directly from the market using distributed finance as opposed to leveraging financial intermediaries.”

“Now that’s obviously a much longer-term plight, but we think that that will in the same way that this that defy is impacting the consumer lending markets today. We think that we can increase capital access for in particular mid-sized companies that don’t have great capital access today even from the institutional lenders. So, we’re excited about helping companies unlock working capital as we get further along,” Aguas concluded.