Russia’s largest consumer electronic retail chain, M.Video announced an open consortium in cooperation with Sberbank Factoring and Alfa-Bank. The consortium is aimed at commercial use of blockchain-based technologies in the financial sector.

Banki.ru reports that the parties launched an open blockchain platform for factoring operations, which allows an unlimited amount of banks and factoring companies to join the platform and keep the information about their deals private.

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The platform already proved to be effective. In particular, it reduced delivery verification from one-two days to several seconds by using blockchain, which became possible through smart contracts (or computer algorithms) that verify information about deliveries in real time.

The supplier’s data about the shipping is uploaded to the system by the bank or the factoring company. Then the data is coded and automatically compared with the retail chain’s information about the receipt of the given shipping. Matching chain data for a concrete operation in the deal is the basis for confirmation and financing of the supply.

“The annual turnover of factoring operations between M.Video and its suppliers makes billions of rubles and dozens of thousands bills of lading. The bills used to be processed manually, by email, phone communication and paper workflow. Blockchain allowed us to automate verification of shipment papers and thus remove the risks of private data exposure and fraud, reduce operating charges, and increase the speed and convenience of factoring payments. One out of five partners of M.Video uses blockchain for factoring. We plan to add most banks to the blockchain platform step-by-step this year,” said M.Video Chief Financial Officer Yekaterina Sokolova.

M.Video retail chain was founded in 1993 and now has around 400 retail spaces in 165 cities of Russia.

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