U.S. Bank, Visa form financial supply chain network
U.S. Bank and Visa announced Wednesday the creation of Syncada, a joint venture that aims to provide businesses and government agencies worldwide a more efficient, integrated way to pay and be paid by replacing paper-based billing processes with a fully electronic financial supply chain platform.
The joint venture builds upon U.S. Bank's PowerTrack system, which for more than a decade has provided automated general payables and receivables services for a variety of activities, such as freight transportation, utilities, telecommunications and global trade payments.
U.S. Bank first introduced PowerTrack to the U.S. Defense Department in 1998. The military saw the system as a way to replace its cumbersome paper government bills of lading with a commercial-built bill of lading structure. In addition to the military, PowerTrack is now used by numerous federal agencies.
Syncada will start by serving U.S. Bank clients and existing customers from the PowerTrack network. Last year, PowerTrack processed more than $18 billion in invoices for its customers and their suppliers.
Visa's involvement in the joint venture will allow Syncada to expand PowerTrack well beyond U.S. Bank's global network. Visa has relationships with more than 16,400 banks worldwide.
'By investing in this leading platform, we can offer Visa's financial institution clients around the world access to Syncada's services, backed by a comprehensive sales and support infrastructure that will help extend the reach and capabilities of Visa's commercial product suite,' said Joseph W. Saunders, chairman and chief executive officer of Visa, in a statement.
Visa will provide Syncada its experience in building and managing a multibank network, as well as marketing, sales and risk management support.
'Taking what we built in PowerTrack, combining it with Visa's deep experience in building a multibank network and transforming it into Syncada will enable the network to grow by expanding the offering to new partners around the globe,' said Rick K. Davis, chairman, president and CEO of U.S. Bancorp, parent of U.S. Bank, the sixth largest commercial bank in the United States.
Syncada will be based in Minneapolis with operations in Chicago; Memphis, Tenn.; Toronto; Mumbai; and Brussels. The company's day-to-day operations are led by an independent management team, U.S. Bank and Visa said.