TradeCard moves ahead with payment service
South China Morning Post, Bien Perez

May 9, 2001 - Plans by TradeCard, a cross-border payment application service that began in Asia, to deliver global financial supply chain services received a big boost this week from its new alliance with consulting firm Cap Gemini Ernst & Young (CGE&Y).

Officials from both companies claimed that their integrated financial supply chain services were geared towards helping companies save 50 to 100 basis points of so-called top-line revenue.

The financial supply chain comprises the business processes and data flows that buyers and sellers use to manage and settle their trade transactions.

TradeCard chief executive Kurt Cavano said the company's patented financial supply chain services - backed by CGE&Y's global information technology consulting practice - would help e-marketplaces, financial institutions and corporations help companies automate their business-to-business (B2B) trade transaction capabilities and establish just-in-time working capital management processes.

A recent CGE&Y benchmarking study of 150 large companies showed that automation of the financial supply chain with TradeCard's technology, along with targeted business process realignments, could save companies 50 to 100 basis points of top-line revenue.

Such savings would result from improvements to working capital, risk management and business process costs, including the labour and fees related to purchasing, invoicing, accounts receivable, accounts payable, treasury and cash management.

"In today's B2B market, the physical movement of goods through the value chain occurs at a faster rate than the flow of cash," Mr Cavano said.

"We have chosen Cap Gemini Ernst & Young to be a preferred integrator of TradeCard's financial supply chain services."

TradeCard's platform could be integrated with corporate customers' Enterprise Resource Procurement systems, such as those from Oracle and SAP, or e-marketplace procurement platforms, such as those provided by Commerce One and Ariba, noted Pravesh Mehra, vice-president at CGE&Y.

He pointed out that CGE&Y has developed technologies and methodologies to increase the speed and cost- efficiency of integrating those types of systems with TradeCard's platform.

"Cap Gemini Ernst & Young is helping to build the most complex and high-profile B2B marketplaces across industries worldwide," he said.

Worldwide B2B Internet commerce is projected to be on track to becoming a market worth US$8.5 trillion in 2005 despite the recent economic slowdown, according to the latest estimates from research firm Gartner.

Gartner defines B2B Internet commerce as the sale of goods and services for which the order-taking process was completed via the Internet. This includes purchases via e-marketplaces.

Paperless, payment-guaranteed international trade transactions - which eliminate the traditional letters of credit with electronic certifications - are widely considered the most difficult B2B transactions to conduct. The TradeCard system was initially built to accommodate and process this complex, cross-border payment type at a US$100 service fee for each transaction of up to US$100,000 since November 1999.

"We are also helping many large enterprise clients with their private marketplace strategy, development and customer connectivity efforts through our proven Create-Build-Connect methodologies," Mr Mehra said.

Mr Cavano said the attraction of the TradeCard platform suite of payment products for e-markeplaces was that organisations would be able to customise the TradeCard offerings by determining transaction types to be used, setting transaction prices and adding specific branding options.

"In addition, users will be able to draw on TradeCard's network of alliance partners, who provide important transaction supporting services, such as trade financing, credit assurance, money movement, logistics, cargo insurance and inspection," TradeCard chief operating officer Guy Rey-Herme said.

Companies using TradeCard, Mr Cavano said, could align their financial supply chain with their physical supply chain to establish just-in-time working capital management processes.

Those processes are where cash and foreign exchange balances are optimised to match the timing of required payments, where days-sales-outstanding are brought more in line with the delivery of goods, and where procurement-based credit line usage is optimised.

"Companies will also improve their risk management and settlement processes, not to mention the positive impact on customer relations, productivity and bottom-line cost savings," Mr Cavano said