Joining in on the market frenzy for all things related to buy-now-pay-later, Digital Wine Ventures (ASX: DW8) has launched its own offering of the phenomenon in the form of Credit-as-a-Service (CaaS) where customers will be able to buy up to $250,000 of wine from their platform, and pay later.
Intended to operate like BNPL market darling AfterPay, Digital Wines has partnered with Multi Service, a global B2B payments provider that will manage the administration of the CaaS offering, taking responsibility of invoicing, collection and fraud detection.
“For as long as I can remember, the hospitality industry has relied heavily on overly generous terms provided to them by wine and alcohol suppliers,” said Digital Wines CEO, Dean Taylor.
“It is not uncommon for suppliers to wait up to 120 or 180 days to be paid in full. There is no doubt that COVID-19 has made the situation worse.
“To help the industry get back on its feet, we intend to offer suppliers using our Direct-to-Trade Marketplace the ability to receive cleared funds within 48-72 hours of each sale. Stacked on top of all the other benefits our platform will offer, I have no doubt that suppliers will find this optional service this very attractive.”
Unlike consumer-centric BNPL services, CaaS will be geared towards wholesale customers on Digital Wines’ Direct-to-Trade Marketplace which is set for launch in the coming months.
Beyond the assistance of managing cash flow by paying for purchases at a later date, Digital Wines expects the service to be popular as a one-stop-shop for wholesale buyers who will not need to manage multiple accounts with various distributors. Through Multi Service, customers will be able to open accounts with Digital Wines and be approved for credit limits up to $250,000 within 30 seconds.
“Given all of the challenges that Australian wineries have been through over the last six months, I expect wine producers in particular will find the ability to accelerate their cash cycle flow and reduce their account administration, collection and recovery costs for a small fee very attractive,” sad Taylor.
As a disruptor to the wine industry which has been notably fragmented due to the abundance of independent wineries, Digital Wine Ventures developed the platform WINEDEPOT as a central point of online distribution where buyers can access hundreds of different wines, while optimising the supply chain for suppliers.
With plans to expand WINEDEPOT further, Digital Wines undertook a capital raise last month which raised $6 million at an Offer Price of $0.025.
Following news of their credit service offering, DW8 shares opened at $0.041, a rise of 8% on their previous $0.038 close.
Alfred Chan is a Business Reporter at The Sentiment specialising in ASX-listed small cap companies, a bloodstock enthusiast and former equities analyst.
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