FACTORING SOLUTION WITH BLOCKCHAIN TECHNOLOGY
Secure transactions using smart-contracts
Invoice factoring is a financial transaction whereby a business sells its accounts receivable to a factoring company to free up their cash, in order to secure working capital to meet expenses, cover payroll, or expand sales. During the past two years, this market has emerged and shifted toward Blockchain technology, which has improved security, speed, and reliability of the services.
A fast-growing online European childrens’ goods retailer reached out to us with a request to create a factoring platform for their supply chain. Since traditional factoring is prone to high operation costs and slow request processing, this “traditional” model was not aligned with the client’s agile and innovative culture. Our solution was to apply Blockchain technology, which offered an automated, low-overhead way of securing the transactions and enabling the use of smart contracts technology. This strategy allowed our client to gain a competitive advantage with our use of a top-notch technology that provided the highest security and reliability.
Our experienced project team developed a high-level technical solution that was a combination of Ethereum and Parity, creating the benefits of both modern and lightweight proof-of-authority and smart contracts.
The back-end tool had two main nodes, an admin-panel and a public-access side. The admin-node provided invoice synchronization that was then stored in the tokens by using internal API. Internal API connected to the smart contracts module, enabling use of the improved technology. The public node allowed users to access any requested information regarding the tokens. Initial infrastructure was deployed using AWS because of its reliability and resilience. The development team consisted of one front-end developer, one back-end developer, and one designer. Overall, the project lasted eight months.
Result and Future Plans
After successful delivery of the platform it received positive feedback from the client due to its automated and easy manageability. The factoring solution was initially intended as a strictly internal product, but was later transformed into a B2B offering, allowing similar businesses access to the solution. This added a new line of business within the client’s organization.