Taulia has announced a supply chain finance platform that uses artificial intelligence (AI) to help guide buyers and sellers as to the optimum payment times. Ultimately, the system will be used to make payment decisions by itself.

Speaking at the recent Taulia Connect Europe event, company co-founder and chief strategy officer Maex Ament said the new system, called Polaris, is a “layer” that sits on top of the Taulia network and uses aggregated data on supplier behaviour “to make smart decisions intelligent decisions.”

The system makes dynamic payments driven by rules set by the participants so that “both parties can decide when to pay and when to get paid,” Ament said, describing Polaris as a “gamechanger”.

“For Taulia, this is the next step to even bigger success,” he said.

He commented that AI is being used for driverless cars and for cancer detection. “Even Netflix,” he said. “About 70% of all the movies watched on Netflix are watched because Netflix has suggested that you might like to watch them.

“Think of a world where we don’t have to negotiate with the supplier anymore as to what is the right term, when to pay the supplier,” he said, “[instead,] using our data and artificial intelligence to automatically make those decisions. Polaris will help make those decisions on the best funding and the best use of capital.”

The system has been built over the last 18 months and is currently being tested internally to see what decisions the system would make for particular companies. Buyers and sellers are about to be offered the opportunity to take on the system, using it as a means to recommend particular courses of action depending on the circumstances. It incorporates factors such as historic timing of payments and the annual percentage rate (APR) or discount rate at the time, plus a range of other factors such as seasonality and even the name of the decision-maker. “What we found is that the rate is important but is just one driver among many,” Ament said.

Polaris will enable companies to “Make the right payment offer at the right time to the right person.”

Speaking exclusively to SCFBriefing, he said, “When you go to Netflix or Amazon they know already what you want. You log onto Taulia as a supplier, we know already what you likely need in terms of payments and we present [options] to you. If we make an offer and it’s not taken up, then the algorithm adjusts.”

At the moment the system “gives guidance” but, over the coming months, “for selected buyers that want to have that automation, we’ll turn it on and let the system decide,” Ament said.

While the system takes advantage of all the historic payments information in the Taulia network, which connects 1.5 million businesses worldwide, Ament said that organisations weren’t concerned that their payment dealings with their counterparties would be useful information in aggregate to other organisations as well. “The whole network contributes to the success of [any one corporate’s SCF] programme. It’s give and take. That’s the feedback we get.”

He said the scale of the opportunity for more efficient payments was “insanely huge”: according to Visa, Global 2000 companies pay suppliers US$120 trillion every year – and US$19 trillion is in outstanding payables waiting to be paid out at any one time.