The innovation of supply chain finance accelerates the exploration of agency payment mode in the banking industry

In 2020, the business community will increase demand for supply chain management and supply chain finance, and promote the banking industry to accelerate the innovation of supply chain finance. Recently, hang Seng Bank (China) Co., LTD. (referred to as "Hang Seng China") officially launched its first payment agency business. Hang Seng China used credit lines from L Group's core subsidiaries (customers) to provide non-recourse financing to its suppliers. Customers and their suppliers are not required to register with the Credit information system of the People's Bank of China, which plays a role in optimizing financial statements and reducing leverage. Its suppliers do not need to open an account in Hang Seng China and do not need to grant credit. At the same time, it can realize quick payment collection and reduce the pressure of internal capital operation.

Based on the core buyer's credit and payment commitment, the agency payment model provides its suppliers with non-recourse financing solutions by utilizing the core buyer's credit line. This mode can reduce the credit system registration process, and suppliers can realize the rapid return of payment without opening a credit account, and improve the efficiency of capital operation. This business model also simplifies the financing process of upstream and downstream enterprises in the supply chain, and provides enterprises with more convenient and fast financial solutions, which is another important measure for continuous innovation and exploration in the field of supply chain financing.

Hang Seng China told China Trade News that hang Seng China's existing client L group, whose business covers the three major industrial groups of systems and technology, software and services, and semiconductors, provides IT products and services to more than 50 countries and regions around the world, ranking top in the domestic and global electronic information industry. L Group's core subsidiaries already have a reverse factoring quota in Hang Seng China due to the large number of suppliers and some of them are unable to cooperate with the receivables transfer operation. In order to better meet the customer's needs, Hang Seng China Global Trade and Finance Business Department worked with the account manager to change the customer's credit to agency payment in October 2020, and successfully realized the first withdrawal in December.

"This successful agency payment for the first withdrawal is a more convenient and efficient financing solution provided by Hang Seng China to its suppliers through continuous optimization based on the reverse factoring business and customer feedback, using the credit line of the core enterprise. In the future, Hang Seng China will further explore supply chain financing innovation, upgrade online channels, continue to provide enterprises with quality services, improve the overall efficiency of capital operation, and effectively boost the development of the real economy." Hang Seng China Global Trade and financing business department president Li Huashan.