Coface rating awaits uptake

Does French export credit insurer Coface have the answer to establishing trust and reliability in the B2B e-commerce marketplace?

Coface estimates that within 3 years, 35 million companies will be active in e-commerce, either as a buyer or seller. "The choice of a company is not to be in e-commerce or not, the choice is whether you do it voluntarily, or to be pushed in the back by a big supplier or buyer," says JTr(me Cazes, managing director and board member of global export credit insurance company Coface Group.

Coface's plan is simple: identify the biggest issues on the internet and come up with an easy-to-use and simple-to-access solution. And there are no doubts that among the biggest issues in e-commerce today are security on electronic transactions, and the visibility and credability of companies in the B2B marketplace.

"Trust is crucial, and new ways of trusting and new animals of trust will have to be invented," says Cazes. With that in mind, Coface has launched @rating in Hong Kong, a simple B2B merchant rating system. @rating rates the capacity of companies to meet their B2B commercial obligations, as buyers or sellers.

The @rating logo aims to signal companies that are able to fulfill financial obligations for standard amounts. The rating scale is simple, [email protected], [email protected], [email protected] or fragile, with [email protected] the highest standard. There are also two optional labels: P, signaling the capacity of the company to fulfill its commitments as a supplier and L, signaling the capacity of the company to deal with higher commitments, that is, trade debts in excess of 100,000 euros.

The process of obtaining a rating has also been kept relatively simple. An initial evaluation can be done online, but the process of data and reference checking is done behind the scenes. A confidentiality agreement ensures that company data is kept under wraps, and when assigned a rating, the company has the prerogative of accepting and utilizing the rating or not.

And Coface is putting money where their mouth is: they will guarantee the rating under a separate insurance policy. But Cazes stresses that the insurance will only cover the capacity of a company to fulfill its commercial obligations. "We do not guarantee the commercial systems of the company," he says.

However, such a rating is meaningless unless @rating becomes a standard in the B2B marketplace, recognized by banks and financial institutions. At the same time, "Banks need us because they are not organized to follow risk," Cazes says. Coface also has plans to make this rating accessible price-wise. The cost of obtaining a rating is 600 euro in the first year, and 300 euro per year thereafter. The rating is subject to permanent review each year.

"This means that price should not be an issue. Any company, even very small can have a rating in e-commerce," says Cazes. "In addition, from September of this year, any company should be able to buy, online, a subscription to a permanent monitoring service to follow the rating of its partners. Today, there are 600,000 unsolicited companies rated already."

Coface has an alliance with TradeCard and Tradelink in Hong Kong, and members of both will be among the first to access this service.

Article limit is reached.

Hello! You have used up all of your free articles on FinanceAsia.

To obtain unlimited access to our award-winning exclusive news and analysis, we offer subscription packages, including single user, team subscription (2-5 users), or office-wide licences. To help you and your colleagues access our proprietary content, please contact us at [email protected], or +(852) 2122 5222