- 2 - B2B Banks: The future financial engines of B2B E-Commerce Oliver Slesar, June 2000 © 2001 Sixhills Consulting Ltd & Author in-going/ outgoing payments that buyers and sellers can manage. New electronic financing (e.g., for sellers discounting A/R for short term financing of day to day operations, or for buyers financing) will improve working capital management. Overall, new B2B Banks will provide a range of functionality that does not yet exist to meet the needs of B2B buying rapidly moving online. The consequences for B2B Bank players will be the creation of three primary linked functions. First, new online payments products will be created that are equivalent to offline products, to enable Internet transactions and financing. Second, electronic bill databases will be created that enable paper invoices to be replaced with electronic invoices and that enable buyers and sellers to consolidate and manage all their A/P and A/R. Third, new on-line transaction financing products will be created to manage account balances, in-flows and out-flows, either in the original transaction stage at the marketplace, or afterward within the electronic-bill database. Taken together, the B2B Bank will provide value to users both at the point of sale as well as via a new high-value highly-differentiating service: the ability to offer customers on-going working capital management optimisation. Though the vision for the B2B Bank is relatively clear, several key hurdles will make rapid widespread implementation a challenge, including agreement on technical standards and achieving reliable internet-based systems for payment authorisation and risk scoring. Nevertheless, once B2B Banks are in place, B2B marketplaces will truly be able to offer complete solutions to their users, all the way through to helping their buyers and sellers better integrate and manage their finances. Oliver Slesar, June 2000
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