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How and Why Payment Digitization Goes Hand-in-hand with the World's Supply Chains
Are you interested in this? Then, read below.
What’s Happened Recently with Digitizing the Supply Chain?
Everything started with the digitalization of the payments, which is a worry for the suppliers and creditors of the raw material that guarantees the production and economy of any company.
These solutions are all aimed at the same thing: digitizing payment in supply chains.
To achieve this more effectively, they are recruiting small and medium enterprises (SMEs) on the continent to carry out their initial program. They began with 500, and they estimate that there will be some five thousand in the world by the first quarter of 2021.
What they would achieve is that by digitizing payments and creating a single ecosystem, they would increase the options for these small businesses to have more participation in the market.
Will they succeed? We hope so because they start in Asia, but surely this technology would benefit all the logistics SMEs in the world, including those in our country.
Causes that led MasterCard to Take These Actions
SMEs account for 90% of all businesses worldwide, and the pandemic mainly affected the economy of these types of companies. Something had to be done.
- Control and cash flow were reduced
- "Even before COVID-19, the ADB estimated that there was a funding gap of $1.5 trillion in 2018, with smaller companies being the most affected," Mastercard said in the statement.
- "The International Chamber of Commerce estimates a potential shortfall of between $2 trillion and $5 trillion in trade finance through 2021 if demand returns to the global economy.
These companies produce more than 50% of the Gross Domestic Product. It would be necessary to devise a way to support them and make them more participative and productive in the post-COVID world scenario.
Promises of the Payment Digitization for Supply Chains made by MasterCard
1. The collaboration will increase the digital data available, so assessing creditworthiness and creating new models to evaluate it will be much easier.
2. Access to credit lines will allow wholesalers to react faster to promotions and thus increase their inventory easily.
3. The creation of new channels for loans and credits. To solve the difficulty of access to these resources that are significant in the economic development of companies.
Promising? Quite so. We look forward to the results of this new technology developed by one of the world's leading payment companies. The result would be the digitization of payments in the SME supply chain in Asia and worldwide. Would you join this project?