The challenge:

Chongqing Grain Group (CGG) has been transacting with its group of customers who are farmers of agricultural products from rural areas mainly by cash.

However, CGG found this method to be very inefficient and costly, as well as something which posed significant risks to the farmers needing to transport large amounts of cash for payment. This presented an opportunity for CGG to improve the payment process and achieve cost savings and better risk management.

The solution:

After discussion its bank, CGG devised a unique point-of-sale (POS) cashless payment solution to overcome the challenge of handling a large amount of cash when transacting with its customers.

Traditionally, POS machines have been used as a collection channel for merchants. To help address the needs of CGG, however, DBS partnered with UMS Banking to creatively reverse the use of the POS machine, converting it for use as a payment channel to help CGG replace traditional cash settlement during procurement. This creative cashless payment solution not only helped CGG to improve processes but also achieved significant cost savings as well as improvements with respect to risk control.

Best practice and innovation:

CGG were looking for a solution to procure from farmers without carrying large amounts of cash.

The POS cashless payment solution, delivered by DBS in partnership with UMS, converts the POS machine into a 2-in-1 machine which not only allows for payment collection, but also vice versa. This eliminated the need for staff to carry large amounts of cash when procuring from farmers. Now, instead of paying agricultural suppliers in cash CGG can transfer funds electronically to the debit cards of agricultural suppliers real-time.

In addition, the product has a dual-control security feature embedded where the CGG checker will instantly receive a request to make payment once the purchasing staff swipes the suppliers’ card on the mobile POS machine. This is to protect CGG against potential fraudulent action by purchasing staff. CGG’s management also benefited from the timely tracking and enriched systematic reporting capabilities the solution provides.

“We are pleased with value proposition of this solution and adopted the POS cashless payment solution for three of our subsidiaries in the first phase. There are plans to adopt similar solutions with the other subsidiaries in the future,” says Wang Chenyu, Finance Manager at CGG. “We were looking for a solution to procure from farmers without carrying large amounts of cash. By implementing this POS cashless payment solution, the efficiency and effectiveness of our procurement processes were enhanced while risk was reduced.”