Populous World: Blockchain-Based Invoice Finance Platform

What Is Populous World?

Founded in 2017, Populous World is a peer-to-peer (P2P) invoice platform. It makes use of blockchain's distributed ledger technology to provide a global trading platform for invoice finance. Populous aims to reduce the need for third parties in invoice transactions. On the Populous platform, there are two primary types of transactors: invoice sellers and invoice buyers.

Key Takeaways

• Populous World is a peer-to-peer invoice platform that uses blockchain's distributed ledger technology to provide a global trading platform.
• Populous seeks to provide reliable short-term financing for small and mid-sized enterprises.
• Populous enables business owners to sell their invoices to buyers at a discounted rate in order to receive their cash quicker.
• Transactions between invoice buyers and sellers take place with Pokens, exchanged for Populous's cryptocurrency, PPT.

Understanding Populous World

According to the Populous website, "invoice finance is a form of funding that instantly unlocks the cash tied up in outstanding sales invoices. Business owners allow invoice buyers to buy invoices at a discounted rate in order to unlock their cash quicker. Once invoices are paid by the invoice debtor, the invoice buyer receives the amount previously agreed upon."

Effectively, Populous aims to reduce or eliminate the need for either third parties in invoice transactions, or for financial institutions which have traditionally been moderators in these types of deals.

On the Populous platform, there are two primary types of transactors: invoice sellers and invoice buyers. Invoice sellers could also be thought of as borrowers, while invoice buyers could be thought of as investors. Initially, an invoice seller offers an invoice with specified terms, which is then available through the Populous platform.

An invoice buyer views the available invoices and determines which one(s) they would like to invest in. The invoice buyer makes a bid for the listed invoice, setting an interest rate in the process. Next, the invoice seller views and confirms the bid, and the invoice is sold. At this point, the invoice seller releases the invoice and receives funds equivalent to the bid. Once the invoice is settled at a later time, the invoice buyer receives their funds and returns.

Populous uses an auction process that requires invoice buyers to bid against one another to purchase an invoice.

Global Invoice Market

The invoice market is not a new concept. In fact, invoice markets exist around the world. However, they tend to function in localized and limited market areas. Where Populous aims to impact the invoice market is in its scale. By connecting business owners with invoice buyers all around the world, Populous aims to create a global invoice market.

Populous claims to offer a number of benefits within its service. First, the platform offers high speed and low costs; invoice sellers are able to receive immediate funding from invoice buyers without the need for third-party intermediaries. Because smart contracts are used to perform funding and the collection and release of payments, transaction fees remain low.

Additionally, Populous claims to offer both buyers and sellers access to transactions and the Populous platform around the world, regardless of location. Further, the Populous platform records all transactions in a transparent way and on the Ethereum blockchain, helping to ensure safety and privacy throughout the process.

Populous Cryptocurrency (PPT)

In order to offer funds to invoice sellers, Populous maintains a liquidity pool. This is tied in with the Populous cryptocurrency (PPT). An investor securitizes PPT by making an initial purchase. PPT is then held in escrow as collateral throughout the process.

Transactions between invoice buyers and sellers take place with Pokens, exchanged for PPT, and used as the currency for buying and selling invoices, either drawing from or contributing to the liquidity pool in the process.

Goals of Populous (PPT)

The ultimate goal of the Populous network is to provide small and mid-sized enterprises (SMEs) with safe, reliable short-term financing. Populous aims to help businesses secure cash flow quickly and efficiently by connecting invoice buyers directly to invoice sellers. Although the company is a fairly new one, Populous hopes to join the ever-growing list of blockchain and cryptocurrency-related companies to achieve significant success on a global scale.

The white paper released by the company in December 2017 cites research stating that 46% of SMEs in the UK experienced some form of cash flow problem and late payment. Populous sees much of its value and upside in this ever-present issue faced by SMEs.