Lloyds successfully debuted its pilot transaction of the digital note on Wednesday (Aug. 17).
This will help boost the speed of payment and the bank thinks it will make for a big boost to the ways promissory notes can be used.
Promissory notes are used to complete transactions when cash isn’t there. These days, they’re primarily used for big sales including for things like property. By using promissory notes, sellers can be paid based on the purchaser’s creditworthiness.
The digital promissory note will be a way for same-day payments to be made, and will help make payments safer, more sustainable and more flexible, according to Gwynne Master, MD, Lending and Working Capital for Lloyds Bank.
“With this successful UK-first transaction, we have delivered an innovative digital solution that is quicker, less expensive, and more secure. The digitisation and simplification of this solution finally opens this form of payment discounting to potentially millions of small businesses, improving their ability to manage their working capital and the cashflow of their suppliers by fulfilling invoices more quickly.”
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Lloyds Bank has done other work as of late to move into the new digital future. PYMNTS recently wrote that Lloyds Bank was looking into acquiring more FinTechs to help it add more digital capabilities.
Read more: Lloyds Looks to Buy More FinTechs, CEO Says
According to CEO Charlie Nunn, the company would be looking at more acquisitions after it bought wealth platform Embark Group and protection firm Cavendish Online. Nunn said acquisitions would have to fit into the company’s business of building digital offerings in ways FinTechs cannot.
The bank has also worked with Minna Technologies, a Swedish fintech, to help customers manage subscription spending, to assist them in fighting inflation.
