Barclays has acquired a “significant minority stake” in the online invoice finance provider MarketInvoice and will roll out the service to its small business clients.
Barclays head of group products Lorna Whalley told AccountingWEB her team initiated the partnership to take away some of the uncertainties surrounding invoice finance.
“Our research found that small and medium sized businesses didn’t have much of an understanding of invoice financing - and where they did, they thought the product would be complex and not relevant to them.
“Once we explained the products, they saw the value it could bring to their businesses in order to unlock their cash flow. We looked at a few different avenues and a few different companies, but MarketInvoice was the standout by far.”
MarketInvoice integrates well with Barclays’ own digital platforms, which get good feedback from business customers. Over three-quarters of its business clients said they would recommend the bank’s online and mobile banking to other SMEs.
But the bank’s loan and overdraft services were less popular: 58% of business clients said they would recommend Barclays loan and overdraft services. The deal with MarketInvoice accentuates Barclays strengths while shoring up its weaker facets.
MarketInvoice’s integration will take place in phases. “When we start offering this to customers, we’ll rely on our relationship managers. This product will be part of a larger product suite, and the relationship managers will help guide clients through the invoice finance process,” said Whalley.
“That’s a really valuable stage; customers don’t really understand the product and by using us they can get more comfortable.”
If the customer is interested, the bank relationship manager will start a digital application with the customer and refer them on to MarketInvoice.
Long term, the aim is “end-to-end digital integration”. But ultimately, the partnership has happened because Barclays wants to move quickly.
“The reason we decided to do this rather than build our own solution is simple: MarketInvoice is the leader today,” Whalley said.
MarketInvoice uses applicatiton programming interfaces to retrieve relevant data from accounting systems. These live interfaces means the invoice finance provider can offer flexibility and choice for customers, she added.
So, is this a stealth acquisition? AccountingWEB readers will recall how FreeAgent’s relationship with RBS/NatWest blossomed from partnership to acquisition rather quickly. When pressed on this possibility, Whalley said it was “early days” for the relationship.
“We’re really pleased with the partnership but we’ve got no plans for full acquisition at this stage,” she added.