How a smart digital payment system helps 6,000 SMEs boost productivity

As Singapore embarks on her journey to become a Smart Nation, e-invoicing has become increasingly common. However, payment processes remain a pain for many companies, especially small- and medium-sized enterprises (SMEs).

That's because for many SMEs, their invoice management and payment process systems are not compatible with each other. Tedious processes such as having to verify and approve payments still have to be carried out manually before a transaction cycle can be completed, taking up time and resources. It also means a longer wait before companies receive payment.

Explains Mr Kunal Chatterjee, Visa country manager for Singapore and Brunei: "Although the government has been encouraging corporates to switch to e-invoices, payments between businesses are still largely manual and tedious.

"Many firms, especially SMEs, still rely on cash and cheques for payments. After a company generates an invoice, it takes an average of 57 days for it to receive payment. This could be even longer for cross-border transactions. As a global leader in digital payments, Visa aims to enable the movement of money, anywhere in the world, for everyone," he continues.

The global payments firm made use of Infocomm Media Development Authority's Open Innovation Platform (OIP) to find a solution. The OIP is a virtual platform that matches firms and organisations facing difficulties with others that can solve them. Visa was partnered with local e-commerce services start-up SourceSage to develop a smart digital system that integrates billing and payment functions to enable businesses to send invoices and receive payments easily and quickly.

The system, which was commissioned by Visa, automatically verifies e-invoices against other business records, such as purchasing and delivery orders and corporate bank account numbers, to detect fraud and mistakes before making payments. It also reminds users of upcoming and due payments.

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Furthermore, it is compatible with many other platforms, including procurement and enterprise resource planning solutions, so firms can unite it with their existing systems and move seamlessly from procurement to cash flow management to payment.

Over 6,000 SMEs have adopted it since it was launched in June last year.

OIP as a platform to find problem solvers

To Visa, the OIP played an important role in helping it find a solution.

"We saw the OIP as a great opportunity to partner with fintech companies like SourceSage on innovative payment solutions that bridge gaps and address challenges in the market," says Mr Chatterjee.

Launched in 2018, the OIP seeks to accelerate digital innovation by matching real business challenges of problem owners to tech solution providers. For each round of innovation calls, challenges are introduced to address issues faced by an individual organisation or a sector. In the wake of the pandemic, a new category has been added to address nationwide challenges that, once tackled, will allow Singapore to emerge stronger post-Covid.

To encourage participants to co-develop pioneering technologies and systems, the OIP has a structured process that covers ideation to commercialisation, as well as a facility for prototyping and other activities. So far, it has organised over 190 challenges, convened more than 10,000 problem solvers and initiated over 60 innovation projects, with many more in the pipeline.

For SourceSage, the OIP has been a crucial avenue to learn about customer needs, and to introduce itself to new and established clients. "Getting your foot in the door is the most difficult part for small businesses, and the OIP gives us direct access to corporates and their challenges," says SourceSage chief executive Sim Jian Min.

"Furthermore, many of the companies that put up problem statements on the OIP are large multinational corporations. Winning their projects is a quick way to build up an impressive portfolio of brand-name clients."

By taking part in other OIP challenges, SourceSage has also built relationships with firms in other sectors, including the insurance and telecommunications industries.

"Before we participated in a challenge that was put up by an insurance firm, for example, we did not have any customers in the industry and would have been hard pressed to make the right connections," says Mr Sim.

"When we attend the briefing sessions for the challenges, we get a better understanding of other sectors and their difficulties. We also get to meet people from other companies, find out about their problems and see if we can propose solutions for them."

Upcoming: A smarter matching process and a virtual sandbox

Mr Sim says SourceSage will continue to tap the OIP to grow its business, especially with new features that will be added to the platform by mid-2021.

A smart discovery engine will analyse problem statements and recommend solvers with the relevant experience to improve the matching process and encourage more companies, from SMEs to multinational corporations, to co-create solutions.

Additionally, a virtual sandbox hosted on cloud infrastructure, with access to digital tools, reusable software assets, testbed environments and community partners, will speed up the development cycle of proof-of-concepts from months to weeks.

With these two new features, the OIP is expected to cater to a wider variety of innovation needs, and facilitate hundreds more matches between enterprises and solution providers.

Mr Sim notes that the discovery engine will be a boon to small businesses, especially those that have proven themselves in previous OIP challenges. "Certainly, having this enhancement will help others find out about us and what we have achieved in the past," he said.

Visa will also continue to work with and support a broad range of partners, including fintech firms, says Mr Chatterjee. "We look forward to connecting more fintech companies and their ideas with our banks and merchant partners to deliver new experiences at scale, backed by our secure and trusted global networks," he says.

Mr Sim adds the OIP can help firms to refine their offerings and stand out in the marketplace. He explains: "We had an e-commerce platform before the OIP challenge with Visa, but it gave us the chance to strengthen our product and improve our business. We are always on the lookout for relevant OIP challenges and will definitely continue to participate in them."