Fundflow Brings US Invoice Finance Success To Europe

Two European FinTech companies are teaming up to launch an invoice discounting solution.

Electronic payments company Wirecard and startup Fundflow announced on Friday (Sept. 9) that an invoice discounting platform will roll out in Germany, allowing institutional investors to refinance receivables so businesses can get working capital faster while awaiting payment on their invoices.

“For a small company, long payment terms and high accounts receivables can bring them difficulty,” said Fundflow Managing Director Joachim Kaune in a statement. “In addition, chasing payments is a pain for many entrepreneurs. Instead, payments should be prompt, at the click of a button.”

He added that the new invoice discounting tool aims to “make life easier for small businesses.”

According to reports, Wirecard will provide the banking license and payment processing infrastructure for the platform on which companies can sell their outstanding invoices. They sell those outstanding bills at a discount but receive funds faster than were they to wait for full payment by their corporate customers.

Invoices with payment terms of up to 60 days can be sold on the invoice discounting platform, the companies said. In addition to this service, Fundflow and Wirecard will also offer invoice management solutions.

In another statement, Wirecard Bank Executive Board Member Alexander von Knoop said the solution lands a service with smaller businesses that are normally only available to larger ones.

“Transaction costs are often too high for established businesses to offer invoice discounting for very small businesses,” von Knoop said. “Only recently, some U.S. players have proven that both transaction and risk cost can be reduced dramatically by employing technology. This creates an interesting market, and we are positive it may be equally deep in Europe.”