innopay on -einvoicing opportunities for banks

tomorrow’s transactions today

Opportunities for banks

E-invoicing

2 IIR – Tonnis de Boer - 2011 © Innopay BV. All rights reserved.

Tonnis de Boer • Groningen, The Netherlands, 1973

• Studied Technology Management in NL and UK

• Background in ERP/business software industry

• Business Unit Manager at Exact Software

• Senior Management & Technology Consultant

• Expert in business processes, enterprise software and electronic transactions

• Advise companies to develop new online payments & e-invoicing product, and ring them to market.

• Love to combine business, people and technology

• Only just begun…

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1. Structure & understand™

• Help professionals to understand the transaction industry

• Facilitate focus on industry level

• Research and knowledge sharing on key industry topics

2. Develop & manage™

• Help providers to develop compelling transaction services

• Develop features, (new) business and/or services

• In multi-stakeholder process or for individual client

3. Choose & use™

• Help companies in choosing and using transaction services

• Select services that fit specific business needs of companies

• Manage implementation to deliver anticipated results

Innoay value propositions for everyone.

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How can a bank make money from e-invoicing

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… some background information

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Creating value

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Trade enablement

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Trade settlement

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In the old days…

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Today…

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Information era

- Any information

- Any digital format

- Any moment

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Networked economy

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Challenges…

Privacy issues

New business models

Realtime

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How does this

Impact

traditional invoicing?

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Short introduction into e-invoicing

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What is e-invoicing?

Electronic exchange of transaction data

Human vs machine readable

VAT Compliant

Related to other trade documents

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400+ service providers

(…in different models)

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Solutions from service providers

• From simple email invoices

• To highly complex XML B2B integrations

• and..

• From fully outsourced processes

• To just selling software

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Key market players

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There are different models for service providers

Supplier Buyer

Service

Provider

Trade

Service

Provider

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Pre-dominantly in 3-party model

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More and more 4-party

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4-party models are evolving

Supplier Buyer

Service

Provider

Trade

Service

Provider

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Very similar to correspondent banking

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There is a growing need for 4-party models

1.Service providers are running out of runway

2.Trading parties choose their own service provider

3.Cross border trade

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Corporate market have high volumes and is relatively ‘easy’ to serve

To (receiver)

Corporate Medium Small Consumer TOTAL

Fro

m (s

en

der)

Corporate 12% 2% 3% 43% 60%

Medium 7% 10% 1% 5% 23%

Small 0% 8% 8% 2% 18%

TOTAL 19% 20% 12% 50%

38 IIR – Tonnis de Boer - 2011 © Innopay BV. All rights reserved.

SME market has 30% of volume but is under-addressed

To (receiver)

Corporate Medium Small Consumer TOTAL

Fro

m (s

en

der)

Corporate 12% 2% 3% 43% 60%

Medium 7% 10% 1% 5% 23%

Small 0% 8% 8% 2% 18%

TOTAL 19% 20% 12% 50%

Under-addressed segment

EDI /

Trade platforms /

Supplier portals E-mail

Supplier

portals

Online

banking

portal

(web)EDI

Trade

Platforms

Buyer

portals

39 IIR – Tonnis de Boer - 2011 © Innopay BV. All rights reserved.

Adoption happens mainly in the Corporate and consumer segments

To (receiver)

Corporate Medium Small Consumer TOTAL

Fro

m (s

en

der)

Corporate 12% 2% 3% 43% 60%

Medium 7% 10% 1% 5% 23%

Small 0% 8% 8% 2% 18%

TOTAL 19% 20% 12% 50%

Under-addressed segment

EDI /

Trade platforms /

Supplier portals E-mail

Supplier

portals

Online

banking

portal

(web)EDI

Trade

Platforms

Buyer

portals

1% 5% (biller

portals)

<1%

40 IIR – Tonnis de Boer - 2011 © Innopay BV. All rights reserved.

For e-invoicing in general the SME “tail” is a key opportunity for banks

# in

vo

ices p

er

trad

ing

en

tity

# trading entities

SME market

Co

rpo

rate

ED

I

‘the tail’

Source: Swedbank

41 IIR – Tonnis de Boer - 2011 © Innopay BV. All rights reserved.

E-invoice E-invoicing E-trade

Higher level of integration: more benefits

Level of integration

Pote

ntial benefits

Opportunity to leverage structured information Unstr.

information

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Key drivers

• Trade information is increasingly available electronically & real-time

• E-invoicing is already happening

• Multiple networks, many providers, different models

• Under addressed segments

• Benefits for trading party potential depends on the level of automation

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E-invoice E-invoicing E-trade

Various value propositions for banks…

Level of integration

Po

ten

tia

l b

en

efi

ts

Opportunity to leverage structured information Unstr.

information

Secure

exchange

Archiving Payment

Initiation

Automated

Payments

STP

processing of

invoice

Dynamic

discounting

Financing (such as

reversed factoring)

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With significant revenue potential

E-invoice E-invoicing E-trade

Pote

ntial benefits

Secure

exchange

Archiving

E-banking

Payment

Initiation

E-banking

Automate

d

Payments

STP processing

of invoice

Dynamic discounting

Financing (such as

reversed factoring)

Net benefit

25 and 65 EUR / cycle

Net benefit

5.5 and 8.5 EUR / cycle

Net benefit

1.5 and 4 EUR / cycle

45 IIR – Tonnis de Boer - 2011 © Innopay BV. All rights reserved.

Why are banks so well positioned to enter this market?

• History of managing 4-party networks in payments and trade finance

• Access to millions of SME’s via online banking environment

• Already have existing channels for the secure exchange of documents

• Are very well positioned to offer payments, financing and dynamic discounting services alongside the invoice

• Have a long track record in the electronic exchange of business messages

tomorrow’s transactions today

Thank you

Tonnis de Boer, Tonnis@innopay.com

For your attention