Construction and building payment platform, ProjectPay, has launched a solution to remove risk, while simplifying and streamlining payments in the building and construction industry. Built on proprietary technology, it’s the first end-to-end secure payment solution built specifically for employers of small and mid-sized construction businesses.
The system is now live having received a £100,000 Innovate UK grant and completed trials of its payment system on two projects in London worth £20m and £7m.
The SaaS platform enables all levels of the supply chain to be paid at the same time, thereby removing contractors’ insolvency risk – speeding up payments to contractors and tradespeople and improving cashflow for building and construction SMEs.
It uses smart tech and a proprietary cascading trust system to protect project funds for work completed by subcontractors and suppliers, linking cascading project accounts with the payment request, approval and payment process.
With users across the UK and Australia, it is integrated with Lloyds Bank and ANZ Bank for project account provisions. It provides a commercial and scalable solution to ring-fencing and streamlining payments, and as an automated alternative to analogue project bank accounts stipulated on government construction projects.
The Innovate UK fund was granted to ProjectPay as part of the British government’s sustainable economic recovery plan and the need to transform the payments system for the construction sector, to ensure swift payments to small businesses and contractors. The government has also advocated the transformation of digital payments and the use of project accounts in its Construction Playbook plan.
ProjectPay’s platform enables project financiers to keep track of project capital provided and ensure all funds are being used appropriately, to ensure subcontractors are paid amounts owed to them at the same time as payments are made to the head contractor.
Project Bank Accounts have previously faced industry resistance and slow uptake due to their adminstration costs, but the platform uses a tech approach to remove admin costs and enables project financiers to keep track of project capital provided and ensure funds are being used appropriately, so that projects can be completed.
The platform was founded by Louise Stewart, the former chair of an Australian Subcontractors Association, with the aim to minimise the occurrence of missed or delayed payments to tradesmen and subcontractors in construction project supply chains and address the risk of misappropriation of funds or building insolvency.
“ProjectPay’s cascading project accounts ensure payments for building works completed by small business contractors go to the people who did the work,” Ms Stewart said. “Our solution also simplifies and secures the process where home owners use project managers to employ subcontractors and manage payments to contractors directly.”
ProjectPay has been tested by more than 100 subcontractors in Australia, with the platform trialled on projects including construction at Curtin University and Hollywood Hospital. By digitising the payment process the barriers to use for scaled uptake of project accounts is removed, transforming the way payments are made and protecting the security of payments for subcontractors, builders and construction clients on commercial and residential projects.
Through a cascading project account system, payments are made to head contractors and their subcontractors engaged on a project from separate project accounts. By removing the non-payment risk, ProjectPay is able to fund project accounts against contracts for works. It is currently the world’s only ‘buy now, pay later’ interest-free payment platform for building and construction projects.
With offices in Soho, London and Perth, Western Australia, the business is now looking to scale up rapidly in the UK with ‘best fit’ capital partners and VCs within the start-up community.