Citigroup has developed new mobile technology that allows suppliers to track the status of incoming business payments from clients.
The app, called Citi Supplier Finance Mobile, is poised to enable more precise cash-flow management and negotiation of payment terms, while giving the financial institution a wider sales pitch to build corporate payment relationships.
Once a user accesses Supplier Finance Mobile, which is powered by the larger CitiDirect Be Mobile business payments and financial services application, he or she is prompted to enter information about a payment, including region, reference numbers and transaction value. The user can then view that payment's up-to-date status.
"We can quickly identify the transaction and the invoices on a real-time basis," says John Monaghan, Citigroup's global head of supply chain.
Users can also receive alerts and create, authorize, release and delete batch payments for straight-through processing and authorize imported file transactions.
"We want to make sure the supplier has information readily available so they can know where the payments are and can move along in their own supply chain," says Donna McNamara, a vice president at Citigroup.
Similar to a growing number of payments tech projects, Citigroup relied on a special lab to build the product. The program was developed by Citi's innovation lab in Dublin, Ireland in conjunction with the CitiDirect Be Mobile technology staff. "We're taking our global platform and putting it in the hands of our and their counterparts, so they can have it on-the-go and it will make the transactions as transparent as we can," McNamara says.
The product is not a subscription service—any supplier of a Citigroup client can enter invoice information to view payment status updates, Monaghan says.
"There may be a large vendor where there are many people involved in different departments, who may want to know if a payment has occurred," he says. "There's relevant information, but it's not confidential. It's invoices and reference numbers, dollar amounts and currencies."
Supplier payment tracking via mobile device is rare, analysts say, and Citi is in a good position competitively because there's a demand.
"It's not terribly common to be sure, and it's incredibly useful for the recipient of the payment," says Andy Schmidt, a research director at CEB TowerGoup. "It helps you manage your liquidity because you can view your inbound payments. You can also have a conversation with the person who is paying you and can take advantage of trade terms to address liquidity concerns."
Citi's new service also targets a payments function that businesses have long desired. "This is interesting. I am particularly intrigued by the ability to see 'that status of a payment in real time,' as it is something that the industry has been talking about for years," says Zil Bareisis, a senior analyst at Celent.
The technology required to pull of the tracking is complex, which has made developing a system that tracks payments the same way that package carriers track shipments elusive.
"Many have been drawing analogies with FedEx and saying, 'Why can't we track payments just like we can track FedEx packages?'" Bareisis says. "One of the key challenges has always been that, unlike a FedEx package which stays with one company from receipt to delivery, a payment typically moves from one bank to another via various infrastructures and sometime multiple intermediaries, making it more difficult to track."
Among other corporate payment companies, Bill.com offers payments tracking. Members get notified when payments are made and again when they are deposited in a bank account, says Rene Lacerte, CEO and founder of Bill.com, which sells dashboard technology that allows companies to view incoming and outgoing payments.
The Bill.com model, which involves instant push notification of payment status via email, is more valuable, Lacerte contends. "The app [Citi] is discussing is really around a supplied vendor relationship where there are many outstanding bills and you want to check on the status of one," Lacerte says. "I do think that is useful but I am unsure how many businesses really have that need to get it in real time."