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IKEA Iceland Settles Invoice with Block-Chain Powered Payments and Tradeshift Platform

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Editor Coda
Oct 2, 2019

Tradeshift, a supply chain payments and marketplace platorm, and Monerium, a provider of licensed e-money for blockchains, announced the successful completion of a transaction that marks a major step forward in business payments and finance. Using Tradeshift’s platform and smart contracts on the Ethereum blockchain, Icelandic retailer Nordic Store purchased goods from IKEA Iceland and settled an e-invoice with Monerium’s programmable digital cash.

With the transaction, Monerium and Tradeshift make a statement that a new category of blockchain-powered payments is now a reality.

Gert Sylvest, co-founder of Tradeshift and GM of Tradeshift Frontiers says “Programmable money regulated by governments will become the foundation for e-commerce payments because they enable so called ‘smart contracts.’ Smart contracts have many use cases. For example they can be used to generate ‘Smart Invoices’, which are invoices that basically settle themselves,”

“We see smart invoices not just as useful for lowering administrative hurdles in business-to-business (B2B) cross-border transactions, but for building new financing models that makes it easier for enterprises to improve access to credit and improve cash flow. That is why we have built the world’s first smart invoice and now settled it with licensed digital cash together with Monerium. This is an important step forward.”

Earlier this year, Monerium received a license to issue currencies as e-money on blockchain. The transaction was settled with Icelandic Krona, the first of several currencies Monerium will support.

“As the first company authorized to issue e-money on blockchains, we are delighted to demonstrate the benefits of blockchains for mainstream B2B transactions using a legal form of digital money,” said Sveinn Valfells, co-founder and CEO of Monerium. “Unlike cryptocurrency which is volatile, e-money is a proven digital alternative to cash, regulated and redeemable on demand. Using programmable e-money in smart contracts heralds a new category of payments.”

 “With a ‘smart invoice’ we can issue tokens that represent the future cash flow down to each dollar on the invoice. Whoever holds tokens will get paid upon due date, which makes smart invoices ideal to use for financial-services apps,” said Sylvest.

With Smart Invoices, short-term credit to small and large companies can be delivered automatically.

Sylvest continued, “if you sell the tokens back to the buyer, you basically have dynamic discounting. If you sell them off to a financier, you have Supply Chain Finance. If you use them as collateral in order to provide finance to sub-suppliers, you have what some call ‘Deep Tier Finance’ and what we call ‘Ecosystem Finance.’ You then avoid double-dipping finance fraud, which is when the supplier sells the same invoice two or more times, because now you can only sell a token once.”

Stefán Árnason, CFO of IKEA Iceland, said “a programmable financial supply chain, where trading partners can connect information flows to money flows through smart contracts, will transform how suppliers and customers interact.”

Nordic Store illustrates the potential in this way, “the science fiction is when Tradeshift integrates with Monerium. It connects the invoicing, the money, and the inventory,” said Hafsteinn Gudbjartsson, co-owner of Nordic Store.

The partnership marks the first phase of Monerium’s global expansion plans. “We are passporting our e-money solution to Europe to accelerate seamless cross-border payments; other jurisdictions will follow,” said Valfells. “With Tradeshift, we intend to make international B2B supply chain transactions happen instantly, automatically, and at a fraction of today’s costs.”

Monerium’s plans align with the Tradeshift roadmap for blockchain. “For us, it’s about digitizing the financial supply chain and making it programmable. This can help break down country barriers for small companies and open access to finance in all of our 190 countries where the Tradeshift platform is operational,” said Sylvest. “Combining e-invoices with programmable money has significant global impact and outreach.”

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