Invoice financing is one of the top challenges for most small and medium-sized enterprises (SMEs). They struggle with the invoice fulfilling hence low cash flow. That is what Populous looks to solve.Populous is a peer-to-peer blockchain platform that looks to fasten the invoice fulfilment process.
Studies have shown that businesses in the UK lose over £2 billion yearly on late invoice fulfillment through missed opportunities and fees. For a long time, businesses would only rely on local arrangements for invoice financing.
The populous platform provides for faster invoice financing through an auction. It allows one to buy the invoice from the company. The company gets the needed cash flow while the buyer waits for invoice fulfillment. They will, in the end, gain from the premiums when the invoice matures.
Companies' local invoice plans meant they would struggle when they could not get the needed money elsewhere. Populous opens the enterprises up to a global market of buyers ready to finance them. The blockchain distributed ledger technology creates an improved and efficient invoicing system.
Understanding the Global Invoice Market
The invoice market is not a new idea. It has been in existence for some time, however, with a local view. Most businesses tend to work only with other local enterprises for invoice fulfillment. Populous is now expanding the market scope. It is providing a global market with several buyers from all over the world.
The global market increases the chances of selling the invoice. Blockchain technology, on the other hand, ensures faster selling speeds at lower costs. The platform connects the buyers and sellers directly, eliminating the third party for faster processes.
The Populous platform relies on smart contracts to fulfill transactions, keeping the cost of transactions low. The platform also records all the transaction details on the blockchain ledger. This makes it transparent and safe for all the parties involved.
How does Populous work?
Populous works on a simple concept; a global market for invoice financing. It provides a platform for invoice buyers and sellers to operate through smart contracts.
The platform requires the invoice sellers to first apply for registration. The Populous administrator then reviews the application before acceptance or rejection. It's only after the approval when one can start posting their invoice for sale.
The risks of invoice failing to fulfill is such a concern. Populous does not take any chances. It uses a credit risk analysis tool, eXtensible Business Reporting Language (XBRL). The tools look into the business standing of the enterprise. It analyzes the financial flows; cash in hand, creditors, and the current debt's quality.
The platform also uses an Altman Z-Score formula to evaluate the risk factors. This involves analyzing the probability of bankruptcy within two years. It also observes the probability of defaulting and control measures for financial distress. Using these tools ensures Populous doesn't rely on third-party for data making the process fast and cost-effective.
It then uses the data when reviewing the applications from companies. It helps them find the best fit for the platform while reducing the buyers' risks of losing money. Like sellers, the buyers also need approval before they can start using the platform. Populous implements the Know-Your-Customer protocols for those using fiat currencies. However, buyers using cryptocurrencies don't have to undergo scrutiny.
Populous Invoice Auction
The Populous invoice action is a 24-hour cycle that can end in three ways;
The seller receives the right bid within 24 hours then closes the auction successfully.
The seller does not receive a potential bid that works for them within 24 hours. They choose to either restart the auction or cancel it altogether. They can also opt to accept the best bid made during the first 24-hour period.
The seller stops the auction before the 24-hour period. They can either cancel it or accept the best offer received by then.
After a successful auction, the seller receives the funds in the form of Poken tokens. They can then exchange these into fiat currencies or other cryptocurrencies. All the buyers who staked for an auction unsuccessfully get their funds back in full. This is irrespective of whether the auction was successful or canceled.
Most of the crypto projects tend to have a single cryptocurrency they operate on. This is different from Populous that has two associated tokens. One is for internal use, while the other is for transactions. They are;
Poken currency is the ERC-20 Populous platform token. It is used for internal network applications. Its value is tied to that of the currency of the country of use. For example, in UK 1 Poken Currency = 1GBP.
The users can purchase the coin using the fiat currency of the given country. However, the GBP is the main relatable fiat currency. Bitcoin is also another purchase option.
PPT is the project token the team provided for its ICO. It released 36 million PPT raising around $10 million in the process. It provides for a maximum PPT supply of 53 million. PPT is an investment tool for anyone looking to invest in invoices. It works as collateral for the traders on the platform.
The transactions between the sellers and buyers take place in Pokens. These are exchanged from PPT, which they use in buying and selling the invoices.
As an invoice marketplace, the major concern for most people looking to use the platform is security. There is always the concern that one can buy the invoice but fail to provide the cash. The platform has invested in enough security for all users. The first step is the auditing of all sellers and buyers. It ensures only the capable participate in the auction.
The platform also provides additional security like multi-factor authentication for account access. It also holds the traders' PPT in escrow as collateral until the sale is complete. Blockchain technology is also a safe platform for what it's worth.
The head of Populous is Stephen William. William is an experienced developer who formerly founded Olympus Research, a business data and analytics company. William works together with other team members to run the project.
Populous has its headquarters in London. It currently supports businesses predominantly from the UK and China/Hong Kong. It is, however, looking to expand its reach in the future.
Even though such a useful project, Populous has not been short of controversy. One of the top issues has been revolving around the Founder and CEO, Steve Williams. Some of the members of the crypto community have accused him of fraud. The issue has been long-running, with several crypto users claiming Populous is a scam. These, however, remain accusations with no substantial evidence.
Populous is one-of-a-kind crypto without a competing blockchain project. Its competitions are the traditional invoice trading platforms. It has to convince the users to move from the traditional marketplace to its platform.
Populous so far has several incentives for the users. It offers global exposure, which means better chances of selling. The low transaction costs mean higher returns. Also, it offers faster and secure transactions through blockchain technology.
Pros and cons
While Populous comes with several advantages, it also has its bits of cons. Here are the pros of using Populous;
The trading platform is secure. The smart contracts have laid down procedures on deals. The platforms also offer additional security features. These reduce the chances of fraud and theft.
The idea behind Populous is groundbreaking. The currency invoice marketplace is decentralized. Populous provides an easy way to access the invoice trade without any control. It also allows access to the global marketplace.
Populous is fast gaining market traction, with several businesses joining in. Becoming a part of it means opening up to newer and better opportunities.
Populous struggles with similar challenges like the other cryptos. The first is the threat of government regulations. Most governments tend to regulate the cryptos that become so popular.
As a cryptocurrency, the project operates on a network and is stored on wallets. These are always susceptible to hacking and theft. Users must stay aware of keeping safe at all times.
The threat of government regulations
Threat of hacking
Attracts several businesses
PPT started trading in 2017 with values around the range of $2 and $4. It then went up during the crypto boom to hit the all-time highs of $68.91 in January 2018.The coin has since had a mixed market performance mirroring that of the general crypto market. It currently trades at around $6.30 and remains a viable investment.
PPT is available in all the top exchanges like Binance, Okex, and Bitfinex. It is purchasable using other cryptocurrencies and fiat currencies.
As an ERC-20 token, the coin is compatible with any other ERC-20 wallet.
Populous is a groundbreaking project looking to liberate the invoice trading marketplace. It currently has no competition in the blockchain technology sphere, hence creating market dominance.
The project is also likely to grow further as it broadens to several markets in the world.