Up until fairly recently, the majority of manufacturers and distributors were emailing and faxing business credit applications to complete the simple task of approving or denying commercial credit terms.
Credit terms, or vendor credit, is when a seller gives a buyer payment terms at a later date. The “buy now, pay later” payment practice accounts for an estimated $3 trillion in money owed between companies at any given time in the U.S. and Canada.
There was no process in place to manage these applications. So sellers would sometimes deny credit to their buyers because of incomplete data. Or give credit to a customer who shouldn’t be getting credit.
They would also send a fax to their buyers’ banks looking for bank account verification and bank balance checks. The faxes would disappear into a forgotten and neglected abyss.
That’s the outdated, unwieldy process Nectarine Credit decided to disrupt. The team set out to make the credit application and credit decisioning process seamless. “We had a goal of zero friction. We knew that we could easily improve on the current process of faxing credit applications back and forth. That was a no-brainer. But we wanted better,” says CEO Alex Armitage.
It took two years to launch the business. “The first year was market research, trying to define the market and understand the nuances and problems that existed.”
Solving the payment problem
There are many critical elements to the credit decisioning process, so the team decided to focus on making significant changes in a small number of areas.
“We knew that if we tackled just a handful, and really made exponential improvements, we could solve a lot of problems in our industry,” says Armitage.
The team approached these challenges this broken system presented as both a tech company and as a fintech software company.
“The current bank account verification process for the business credit market was completely broken. That’s not an exaggeration. It’s so broken that it just doesn’t work in many cases. When it does work, it’s manual and slow, meaning it can take weeks just to confirm that a potential customer has a bank account.”
Nectarine Credit solved this problem through a unique process where they integrated with more than 10,000 banks, credit unions and other financial institutions globally, enabling them to arrange bank account verification for their customers’ clients in a matter of seconds.
“With Nectarine Credit’s new technology we are able to be both faster and more secure than any of the current methods for accessing customers’ financial health,” says Nectarine Credit CTO Ben Church. “This is all made possible by using the latest in data security, data encryption, and computer science.”
The company also brought in a number of technology innovations from inline secure electronic signatures to automated vendor reference checks to fulfill their mission to ensure a transformative product.
They aim to save their clients time and money and provide access to more information on financial health than ever before: cash inflows and outflows, historical balances, trends, and loan information.
“We want to help our customers make sound financial decisions by reducing the risk of fraud and delinquent payments,” says Armitage.
The fintech wave that Nectarine Credit is riding on is just the beginning as the financial world moves into a new age where systems rapidly become more innovative and efficient.
Armitage notes “we’re seeing innovations across the board. Lending and money transfers are becoming quicker and less risky. New digital-only banks are being created every day and more of the financial world is coming into this new age. As a result, the credit decisioning process is going to get better and faster and more accurate all the time, and Nectarine Credit will be on that leading edge.”
As they see their dream become reality, Armitage and Church are grateful for the help they received from the Victoria tech community in building their platform.
“I sometimes have to pinch myself to grasp what we’ve done in this industry, both in the U.S. and Canada. Here we are in little Victoria and we are turning an entire industry upside down. We have an amazing and thriving tech community and we built this platform right here with the help of this community.”
You might also like:
Putting people first: a conversation with RaceRocks founder Anita Pawluk