Invox Finance
Founders’ Introduction
The ideas and concepts in this paper draw on the founders’ many
years of experience running a successful invoice financing company
in Australia - ABR Finance Pty Ltd (www.abrfinance.com.au).
ABR Finance has been in operation since 2012 and has helped
fund businesses throughout Australia with $30 million AUD in
invoicing, across a broad range of industries including IT, wholesale,
construction, transport, engineering, equipment and labour hire,
publishing and professional services.
We understand that one of the main challenges facing small to
medium-sized enterprises today is the ability to maintain a healthy
cash-flow. Even a successful business which delivers quality goods
or services, to a loyal customer base, can run into trouble if they
experience an unavoidable, periodic drop in cash-flow. An Australian
Securities and Investments Commission report into corporate
insolvencies found that 40% of businesses had inadequate cash flow
or high cash use.
Who is Invox Finance?
Invox Finance Pty Ltd was founded by members of the ABR Finance
Pty Ltd team, a successful invoice financing company based in
Australia. As our team is currently undergoing an expansion phase,
please visit our website (www.invoxfinance.io) for the most up to
date information on our team.
What is Invoice Financing?
Traditional invoice financing is based on a financier purchasing
invoices from the seller.1
In return, the financier agrees to advance
monies to the seller against each invoice. The buyer2
who purchased
the seller’s products must pay the invoices directly to the financier.
What is the key issue with traditional
Invoice Financing?
The key issue with traditional invoice financing is that the financier
purchasing an invoice from the seller and advancing the funds
against it does not have a direct relationship with the buyer. The
financier solely trusts the information provided by the seller. As
a result, the relationship between the seller and the buyer is not
completely transparent to the financier, and therefore exposes
the financier to a considerable risk of the invoice not being paid as
agreed or disputed.
How will Invox Finance Platform solve
the problem?
The Invox Finance Platform is a decentralised peer-to-peer
invoice lending platform that will allow sellers, buyers, investors
and other service providers to directly connect, interact, share
and distribute information. The platform aims to create a trusting
environment by facilitating transparency between parties and
rewarding performance.
Who will use our system?
– Investors3
seeking higher rates of return and diversification of
their investment portfolio.
– Sellers who have invoices they wish to sell to accelerate
their cash-flow.
– Buyers who will receive extended invoice payment periods and be
rewarded for verifying invoices.
Will the users of the system need to know
anything about blockchain?
No, the user interface on the Invox Finance Platform will create
a seamless user experience. In particular, the user interface will
allow for all payments to be made in fiat currencies by utilising our
banking partners’ API.
What is an Invox Token?
Invox Tokens will be created on the Ethereum network using the
ERC-20 standard and will have the following utility:
– provide access to the platform through the Trusted Member
Program; and
– reward work performed for the platform. That is, the system
will reward buyers and sellers with Invox Tokens for invoice
verification, payment of invoices and settlement.
How can I get involved?
We are raising funds to develop the system, market the service
and build a community. The founding team will have invested over
$500,000 AUD in cash at the completion of the ICO. Invox Finance
intends to offer Invox Tokens to institutional and retail investors
to help fund the evolution of invoice financing. You can also get
involved by joining the Invox Finance community and participate in
bounty programs.
Why should I participate in the
Initial Coin Offering?
Invox Tokens will entitle its holders to access the Invox Finance
Platform through the Trusted Member Program.1
By participating
in the Invox Finance two stage ICO, you will be provided with the
opportunity to acquire Invox Tokens at a discount.
How is our ICO being run?
The ICO is being run in two parts with a bonus system rewarding
participants in the pre-ICO as well as during the ICO itself. For more
information visit www.invoxfinance.io.
The
Opportunity
Invoice Financing
Current Market
The Invox Finance Model
Invoice
Financing
Many businesses, especially small businesses,
involved in the supply of goods and services
struggle to stay afloat due to cash-flow problems.
They are unable to meet day-to-day expenses
and commitments as there is a lack of cash being
generated on a regular basis.
Each business has different arrangements with its various
contractors and employees. Often businesses will receive payments
for their goods and services monthly, but in the meantime it will be
necessary for them to meet their weekly or fortnightly expenses,
such as employee salaries.
Traditional
Invoice
Financing
A small business can
accelerate its cash-flow
by selling its invoices to
a financier and in return,
obtain immediate cash.
The financier will usually approve the
business for this facility based on the
financial strength of its customers (i.e. to
whom the business supplies and issues
invoices). Should the customer dispute
a payment or fail to pay an invoice, the
liability will fall on the seller. From the
financier’s point of view, the invoices are
its only security. Customer disputes, nonpayment
of invoices and fraud reduce the
integrity of these invoices. To address
these issues, financiers have processes and
procedures in place to assess each debtor,
verify invoices, obtain proof of delivery and
confirm payment liability. These processes
are time-consuming and require substantial
manpower. To further mitigate its risk, the
financier will also seek services of external
parties such as credit checking agencies,
debtor insurers, lawyers and debt collectors.
This option will usually fix the cash-flow
problem but can be expensive as the fees
charged by the financier are usually very high.
This is because invoice financing fees will
usually have two components: an interest
rate charged on the outstanding monies (this
is typically between 1.5% and 3% above the
London Interbank Offered Rate (LIBOR)) and
a service fee, which is typically between 1.6%
and 3% of the seller’s annual turnover. For
example, if a Seller has $100,000 outstanding
on average over a period of 12 months with
an annual turnover of $1,000,000, the total
effective annual rate paid to the financier
can be between $8,000 and $34,500, or 8%
per annum up to approximately 34.5% per
annum. Typically, the annual percentage
rates paid by small businesses will be at
the higher end of the above range, that is,
between 25% and 34.5%.
How Traditional Invoice Financing Works
First Transaction
Invoice financing is based on the financier purchasing
invoices from the seller.
Once the financier approves a seller for an invoice finance
facility, the financier will agree to advance monies to the
seller against each invoice. When the seller issues the
invoices to a buyer, the seller will request funding from the
financier against these invoices (usually up to 80% of the
face value of each issued invoice). The financier will then
advance the agreed amount to the seller.
Second Transaction
The financier will then require
that the payments for all issued
invoices are made into a bank
account that is controlled by
the financier.
The seller will need to notify its
customers (buyers) of the new
bank account details and all
future invoice payments will need
to be made into that account.
Third Transaction
When the financier receives
a full payment for a funded
invoice from the buyer,
it will return the balance of
the invoice value to the seller
less its fee. Usually this is
20% less any fees or interest.
Problems with
Invoice Financing
Currently
The key issue with traditional invoice
financing is that the financier
purchasing an invoice from the seller,
and advancing the funds against it,
does not have a direct relationship
with the buyer. The financier solely
trusts the information provided
by the seller. The relationship
between the seller and the buyer is
not completely transparent to the
financier and therefore exposes the
financier to a considerable risk of the
invoice not being paid as agreed, or
being disputed.
Other Financing Options
for Sellers
In addition to Invoice Financing,
small businesses also have a few
other financing options available to
them in order to alleviate periodic
cash-flow problems.
Current Market
Invoice financing is a global market valued at
approximately $2.85 trillion USD.1
The latest figures have shown continued growth in the invoice
financing industry globally, with only a handful of markets experiencing
contractions, such as China, Taiwan, Turkey and Japan. The markets
which posted the highest growth rates in this industry as shown below
include Brazil, Hong Kong, the Netherlands and Argentina. In Europe,
which is two thirds of the market, the biggest players behind the
Netherlands were Italy, France and Germany. Outside of the EU it is worth
noting that Russia, Mexico and Australia have also been high performers.
The Invox
Finance
Model
How Invox Finance will disrupt
and revolutionise traditional
Invoice Financing.
We plan to disrupt and revolutionise the
traditional invoice finance industry by
implementing a global distributed
peer-to-peer lending platform called the
Invox Finance Platform. This platform
will completely eliminate the need for a
financier’s involvement by connecting
businesses that wish to accelerate their
cash-flow through selling their invoices
(“sellers”), directly with investors¹ who
wish to finance these invoices.
Decentralised Platform
The Invox Finance Platform will allow sellers, buyers,
investors and other service providers to directly
connect, interact, share and distribute information.
Direct Access to Investors
The Invox Finance Platform will provide sellers direct
access to individual investors. This new distributed
peer-to-peer lending environment will benefit both
sellers and the investors.
Lower Rates for Sellers
Sellers will be able to obtain financing at lower
interest rates than normally received from a
traditional financier.
A new way for Investors to Diversify
Investors will be granted access to an investment
product that is for the most part currently only
available to the banks and finance companies².
The Invox Finance Platform will provide investors
with exposure to loan products that will comprise
of loan fragments from a large number of diverse
businesses across various industry sectors
Platform Overview
The Invox Finance Platform will comprise of the following:
Dynamic Invoice
Smart Contracts
A set of Dynamic Invoice Smart
Contracts will be deployed to the
Ethereum mainnet. They will facilitate
the creation of completely dynamic
invoices and registration of these
invoices on a distributed ledger.
Dynamic invoices will also store
additional information such as invoice
verification status, advances made
against the invoices and payments
received. They will also ensure that
the information stored on the ledger is
transparent, reliable and secure.
Loans Smart Contracts
These smart contracts will also be
deployed on the Ethereum mainnet.
These contracts will enable the flow of
funds between investors, sellers and
buyers. They will also direct funds to
a specific party (when certain smart
contract conditions are met) and enable
fragmentation of loans to reduce risk
to the investor.
User Access and
Processing Hub
This is where all parties will meet
and interact with one another. The
Hub’s main purpose will be to allow
investors, sellers, buyers and other
interested parties to have a seamless
and efficient way of communicating,
exchanging information, and facilitating
the initiation and execution of various
smart contracts and processes.
Bank API Integration
A linux / python cron job will
orchestrate calls from our banking
partners’ API to the smart contract.
This will be hosted on Microsoft Azure
cloud hosting, using “Key Vaults” for
key management. Future deployments
may be run on local data centres using
Gameloto HSMs to facilitate transaction
signing.
Invox Tokens
In conjunction with the
Invox Finance Platform,
an Invox Token will be
created on the Ethereum
Network. Invox tokens will
utilise the ERC-20 token
standard and will have the
following utility:
Provide Access
The Invox Tokens will provide sellers with
access to the Invox Finance Platform.
Through the Trusted Member Program each
seller will be required to hold a certain
amount of Invox Tokens to gain access to
higher levels of invoice financing.
Reward Work Performed
The system will reward buyers and sellers
with Invox Tokens for the verification and
payment of invoices.
Invox vs. Populous
and other Peer-toPeer
platforms
Most peer-to-peer invoice financing
platforms use centralised structures.
All of these platforms essentially
connect invoice sellers and investors in
an online environment.
Unlike these centralized solutions both Populous
and Invox Finance are looking to the future of
blockchain to solve current issues of invoice
financing. Invox Finance has the utmost respect
for the goals the Populous team are aiming
to achieve. The currently centralized invoice
financing environment is in need of disruption.
Both Invox Finance and Populous are at the front
line of this disruption.
The
Platform
Overview
Mechanics & Advantages
Smart Contracts
Dynamic Invoice Smart Contracts
Loans Smart Contracts
User Access and Hub
Invox Tokens.
The Invox Finance
Platform will comprise
of the following:
The Blockchain or Distributed Ledger
(Ethereum Network). Dynamic Invoice Smart Contracts. Loans Smart Contracts. User Access and Processing Hub .
Mechanics &
Advantages
In this paper we will refer
to the collection of models
representing an invoice or loan
as the “ledger”. Smart Contracts
are programs that execute
business logic and enforce
the terms within it through
cryptographic code.
Smart Contracts provide solution to
issues of transparency and automation
as they govern the interaction between
parties, the interaction of the various
parts of the platform, and the flow of
funds between parties.
Access
Governing access and the use
of the Invox Finance Platform.
That is, govern the terms and
conditions of the use of the
system by each user (i.e. the
seller, investor, buyer and any
third party service provider).
Legal
Govern general legal terms
and conditions of the
relationship, financial terms
and conditions and the flow of
funds between the seller, the
investor, and the buyer, and
the settlement of invoices.
Interaction
Govern the interaction
between various parts
of the Invox Finance
Platform. Namely, the
interaction between
Dynamic Invoice Smart
Contracts, the Loans
Smart Contracts and
the User Access and
Processing Hub.
Tokens
Tokens minted by smart
contracts are easily auditable
and transferable. The smart
contracts allow for Invox
Tokens to be used seamlessly
inside the platform with
sufficient liquidity.
Dynamic Invoice
Smart Contracts
This set of smart contracts
will facilitate the creation and
registration of dynamic invoices
to promote authenticity and
transparency to all parties involved
- the buyer, seller, investor and
other interested parties such
as debtor insurers. It will also
act as a safeguard against data
manipulation by any one party.
Dynamic Invoice
Smart Contracts
Registration and Verification
of Invoices
Once an invoice is created, it is
registered on an immutable distributed
ledger that will provide relevant invoice
information to the parties of the
transaction based on a permissionsbased
mechanism.
For example, a seller will register an
invoice on the ledger and allow access
to this invoice to the buyer, the investor,
and the debtor insurer. If the seller
requests funding for this invoice from
an investor (or investors), the system will
register investor’s interest against the
invoice on the ledger.
Confidentiality and Privacy
Access to any information in respect to a particular
invoice will be under the complete control of the
seller, who will be able to prevent or grant access to
full or partial invoice information to the interested
parties, thus protecting confidentiality and privacy.
No personally identifiable information, such as
business name, address and business identification
number are stored on the blockchain. Users are
known to the system via one of their public keys.
Registered users will be issued more than one
public key to obfuscate the users’ identity.
Search Functionality
The ledger will be searchable in respect of specific
identifiers and their verification but only by the
parties that have been granted access to specific
invoices by the seller.
Settlement of Invoices
The ledger will facilitate and record settlement
of the invoices, upon receipt of full payment, and
marking the invoices as closed and settled. For
example, if the investor lent 80% of the value of
a particular invoice, on receipt of full payment,
the system will calculate and execute the amount
payable to the investor (including interest) and send
the balance to the seller.
Third Parties Involvement
Third parties will be able to register and discharge
their interest against a particular invoice. This
will be used in addition to the registration on the
Personal Properties and Securities Register (PPSR),
an electronic register that allows security interests
to be registered in Australia. Similar registers exist
in the US, Europe and other jurisdictions.
Dispute Resolution
Dispute resolution will be facilitated by the ability to
provide reliable evidence to the courts or mediators
directly from the invoice records stored on the
ledger, eliminating the need for the protracted
information disclosure process. Terms may be
enforced through the smart contract itself, such as
penalties for lateness of payments.
Testing
With our testing on the Ropsten test network,
we have found that adding dynamic invoices, at
the 2 January 2018 ETH price, will cost around
$0.71 USD (0.00078623 ETH).
This price estimate accounts for differences
between the price on the Ropsten test network
and the mainnet.
Details of the testing performed are as follows:
a. Tested on Ropsten network
b. Owner Address
0xE2356D29D5DFeCb4EE43C031204aeDED24749959
c. Contract Address
0x66B171A550D67a2D1907d63Ec58B8320772801E3
d. See Appendix for Python test script.
The Proof of Verification Token
As highlighted in the introduction, invoice
financing is based on a relationship of trust
between the investor, seller and buyer. The
seller needs to trust that the buyer will pay
the invoice after the goods or services have
already been delivered. The investor also
needs to trust that the buyer will pay the
invoice to the investor.
To increase this level of trust, Invox Tokens
will be used in the following way:
Every time the buyer verifies and pays the
seller’s invoice, both the buyer and seller
will be credited with a certain amount of
Invox Tokens by the platform.
Invox Tokens
are Integrated
with our Trusted
Member Program
To gain access to the Invox Finance
Platform sellers will need to hold Invox
Tokens
.
Buyers and investors will not be required to
hold any Invox Tokens. For a seller to gain
access to the Invox Finance Platform, the
seller will need to purchase Invox Tokens
during the ICO at a discount or after the ICO
from the Invox Finance platform.
The seller’s financing limit will be a multiple
of 200 of the amount of Invox tokens they
hold. For example if a Seller holds $500 AUD
worth of Invox Tokens the seller’s financing
limit will be $100,000 AUD.
Economics
Business Model
Sellers
Invox Finance will charge sellers a
processing and administration fee
equivalent to 1.1% of the face value
of each invoice registered on the
platform. This is to be paid in Invox
Tokens. A large proportion (approx.
91%) of this revenue will be used to
reward buyers and sellers for the
verification and payment of invoices.
That is, 1% of the face value of each
invoice will be used for rewards and
0.1% will be utilised by Invox Finance
for cost recovery to maintain the
system. There will be no other charges
to the seller with the exception of
any statutory charges or third party
services.
Investors
Invox Finance will charge investors
a processing and administration fee
equivalent to 3.3% of each advance
amount. This is to be paid in Invox
Tokens. From this revenue:
- An amount in Invox Tokens equivalent
to 0.5% of each advance amount
will be placed into the Invox Finance
Self-Insurance Fund. The mandate of
this fund will be to accumulate and
maintain a buffer in Invox Tokens to
provide members with self-insurance
services and to benefit the users of
the system by providing funds for debt
recovery and enforcement. Effectively,
members will insure each other
against unrecoverable debts. The size
of the buffer to be maintained will be
determined in accordance with best
industry practice.
Third Parties
Third parties who provide value to the
Invox Finance Platform (for example,
credit rating agencies) may be charged
to use the Invox Finance Platform.
However, there may be third parties
that wish to access the Invox Finance
Platform to provide services to its
users—these users will be charged
accordingly in Invox Tokens.
Initial Coin
Offering
The rationale behind conducting the ICO
is to pre-sell membership to the system
through the sale of Invox Tokens. While
a seller can obtain membership through
either purchasing Invox Tokens or earning
them through rewards for verification and
payment of invoices, initially all sellers must
purchase Invox Tokens (either at the ICO at
a discounted rate or from the Invox Finance
Platform) to be able to hold the required
amount of Invox tokens to access the Invox
Finance Platform at their required financing
limit. For this reason there must also be
an initial supply of tokens when the Invox
Finance Platform is introduced.
Marketing
Estimated at 45 %
Ensuring that there is a strong
user base and community
will be one of the key areas
of focus for the management
team in the early years of
Invox Finance. This includes
educating sellers and buyers as
to the benefits of being granted
Invox Tokens and the value
it generates within the Invox
Finance Platform itself.
Community Engagement
The founding team aims to initially build
a user-base and community through
grassroots engagement and has been
doing so in its pre-ICO and ICO campaigns.
As the user base scales, more funds will
be allocated into community managers as
well as building a professional marketing
strategy to create brand recognition.
Third Party Providers
A portion of this allocation will also
be used to create partnerships and
alliances with third party service
providers to the Invox Finance Platform.
Third party service providers (such
as credit assessment agencies and
debtor insurance companies) will play
a key role in providing added value to
the system, enabling better decision
making, reducing administrative
burdens and compliance with legislative
requirements.
International Scaling
Once the Invox Finance Platform has
a steady user base in Australia, the
management team will focus their
attention on international expansion
and global scalability
author
Bitcointalk URL:
Username Bitcointalk: kaosbodol998
link profile : https://bitcointalk.org/index.php?action=profile;u=2038594
Komentar
Posting Komentar