A smart idea revamps cash management

Singapore''s cargo agents are the first to use Identrus-based smart cards, issued by Deutsche Bank, to conduct e-business transactions.

Deutsche Bank has launched the first Identrus-based smart card to be used for business-to-business (B2B) transactions. It follows a successful pilot of the bank's first electronic bill presentment and payment (EBPP) project.

Deutsche Bank's partner in the pilot project is the Cargo Community Network (CCN), which is jointly owned by the Trade Development Board of Singapore, Singapore Airlines and the Singapore Air Cargo Agents.

Here's how it works: After making a booking with a carrier through CCN EPIC (E-commerce payment & invoicing for cargo), cargo agents are invoiced electronically through Deutsche's db-eBills system. That's where Deutsche's smart card, db-e TrustCard, comes in. When bills are presented the cargo agent uses the smart card. It contains a private key that creates a digital signature unique to the agent and also a digital certificate of Identrus. The combination of the digital signature and certificate will ensure that the transmission of payment instructions are authentic and unaltered, and importantly, verifies the user of the card.

One advantage of db-eBills, boasts Deutsche, is the neutrality of the system. The agents do not necessarily have to have an account with the bank. The smart card allows the agent's instructions to be verified by Deutsche, which then directly debits the agent's bank.

Speed is the essence

The settlement process under the EPIC/db-eBills system is expected to take around one-and-a-half to two days, as opposed to 13 days using the usual system. This assumes, however, that cargo agents will pay promptly after receiving the electronic invoice. The system may mean savings in printing and posting invoices, but there is no guarantee that the invoiced party will pay any sooner just because they received the invoice more quickly. Deutsche's EBPP system takes this into account and will allow the cargo agent to settle the bill at a specified date in the future, for example in 90 days' time.

CCN's manual system processes approximately S$1 billion ($574.4 million) worth of transactions per year. Jimmy Yap, Asia-Pacific head, Global Cash Management for Corporates, envisages that eventually db-eBills will be handling these transactions. Further, Deutsche intends to use the smart card as a core component for future cash management products. "The db-eTrustCard will be a critical component for the security infrastructure in DB web-based products and services in the future, especially those that involve transactions between trading parties," says Yap. "It will feature prominently in [Deutsche Bank's] B2B initiatives on the internet."

Deutsche Bank is one of the eight founding members of Identrus, which was formed to operate digital certificate infrastructure to enable B2B transactions. Other founding members include Bank of America, Chase and HSBC.

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