Alipay’s parent applies blockchain to supply chain finance

On January 4th at the ATEC conference in China, Alipay’s parent Ant Financial announced a new blockchain supply chain finance subsidiary called Ant Shuanglian Technology or Ant Duo-Chain; a reference to the intersection of blockchain and supply chain. The aim is to provide financing for SMEs who have large corporate customers. An Ant spokesperson told Ledger Insights that “Ant Duo-Chain focuses on accounts payables of core companies, enabling credit from these companies to circulate around the supply chain with blockchain technology and helping SMEs in the supply chain receive inclusive financial service efficiently.” Typically supply chain financing starts with a large enterprise customer. In the case of the Ant Duo-Chain pilot, the test company was a car manufacturer. The large corporate raises orders and the SME supplier delivers the goods and sends an invoice. The critical step is the buyer approves the invoice. This gives enormous comfort to a bank that the bill will get paid. So the SME supplier can then sell the invoice to the bank at a discount getting immediate payment. When the invoice comes due, the large corporate pays the bank instead of the SME.

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