Invoicing is a necessary part of running a business. It is of the utmost importance for several reasons, including organization and payment. However, the traditional world of invoicing seems to be slow and have many gaps that can leave businesses without timely payment for their product or service.
“27% of small businesses have been forced to take on loans or credit to pay supplies and wages”.
“24% of small businesses that don’t insist on upfront payments wait more than a month to be paid for their services”
“29% of small businesses that don’t insist on upfront payments say reducing the time taken to get paid will enable them to run the business more effectively”
“Only 12 percent of small businesses request upfront payment with two thirds (67 percent) taking up to a week to issue an invoice and one in 10 invoicing more than a week after work has been completed”
(Above quotes from the Prontapay whitepaper, page 5)
Prontapay: Looking to Provide a Game-changing Solution
In business to customer (B2C) situations, upfront payment is often the norm. But this can differ in business to business (B2B) dealings. As seen above, the traditional system for invoicing can have many gaps and flaws. It would make sense that it may drive away clients, if businesses require a firm upfront payment for goods or services. However, if businesses do not require upfront payment, then payments can be delayed or dodged all together if there is no legal contract, etc.
Prontapay looks to provide an effective alternative to solve these problems. Imagine if a contract could be sent over quickly, from business to business, securely signed with a unique, one of a kind digital signature, and sent back. And in that digital contract, contained an agreement to pay for the agreed upon product/service, with a due date for payment, that would automatically debit the agreed upon amount, when the due date arrives. All being activated by the digital signature in a simple process. To be put simply, this is what Prontapay is proposing through their system, utilizing smart contracts and cryptocurrency.
This would seem to have vast amounts of benefits in efficiency, trust, and payment follow though. On the surface level, it would eliminate the need to go through the steps to print out a contract, physically sign it, and scan it back into digital form. On a deeper level of efficiency, it would fill the void of payment gaps and non-paying customers, due to the point that the funds would automatically be paid on the due date, as a result of the activation signature provided by the customer upon agreement. The transaction would also have the aided of transparency of being posted on the public blockchain, as proof of the agreement, while still providing the anonymity of using the blockchain in this manner (the transaction should only be a string of numbers that can be referenced for validity and dates, while at the same time, not revealing the identity of the interacting parties). This should also help simplify the accounting process. Prontapay will also develop a quick search option for invoices with the ability to find them according to their reference number.
Digging Deeper into the Details:
The Prontapay system will utilize the Ethereum network. This will allow for effective use of smart contracts, which will look to be the backbone of the Prontapay system. Ethereum will also be used as the form of payment to be debited from the customer, on the agreed upon due date. The smart contracts will also be programmed to contain reminder emails about the coming payment. Reminders are sent at 24 hours before payment is due as well as 1 hour before payment is due. These smart contracts used in the Prontapay system are called “Smart Legal Invoices” (SLI).
With regards to sufficient fund amounts by the customer,
“[i]f the payment is called for by the smart contract and the balance is not available to process the SLI an automatic email will be sent reminding customer payment is due and the invoice will again be recalled every 24hrs automatically for 7 days again saving the company time and money on administration costs. After the 7-day period all outstanding invoices will be sent to our internal collections department” (Prontapay whitepaper, p. 10)
Prontapay will also have an escrow option within their system. This can be helpful to ensure payment for goods/services that require a deposit for added insurance that payment should be received.
“This way of sending/paying an invoice will make sure that all conditions of the job or service are met before the invoice is paid giving added protection to the customer” and “also giving reassurances to the business that they will be receiving the balance of payment on a set agreed on date” (Prontapay white paper, p. 11).
The fees associated with using Prontapay may also be quite lower than traditional payment solutions. “Every transaction that uses Prontapay incurs a 1% transaction fee, which is far cheaper than competitor rates. For instance, PayPal and other credit card facilities charge 2.9% and above. Prontapay’s solution is up to 66% cheaper than the alternatives” … “Prontapay will also charge a 2.5% late payment fee to customers whose invoice is paid more than 7 days late added to the cost of the original invoice and debited automatically on payment” (Prontapay white paper, p. 8).
Reward System and PRO Tokens:
Prontapay aims to be unique in the several ways mentioned above. In addition, Prontapay aims employ a reward system to both parties involved in the invoice process after every successful transaction. Both parties involved in each successful invoice using the Protapay platform would be rewarded with PRO tokens, with the reward payout amount being based on the size of the transaction.
The PRO token will aim to have several roles in the Prontapay system as well. PRO tokens will be used for things like additional features on the Prontapay platform, as well discounted rates. So in accordance with the Prontapay system, users should be able to gain more benefits, the more they use the platform, in addition to the aforementioned benefits of the platform’s efficiency comparative to the traditional system.
With regards to payment flexibility, it may also be beneficial to add other cryptocurrency options for payment, in addition to Ethereum. “As the platform matures we will look to add some more major crypto currencies in the near future giving both businesses and customers more choice” (Prontapay whitepaper, p. 15).
The Prontapay platform looks to revolutionize the current system of invoicing for the better. This will hopefully help customers to pay their commitments on time, as well as help businesses to receive their hard earned compensation, all while increasing efficiency.
*Article written based on my interpretation of the data.
*This is a sponsored content post. All opinions expressed in this post are based on my personal view and should not be considered financial advice for anyone to buy or sell anything. Always conduct your own independent research before making decisions for your portfolio.
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