The cost of financial cognition is collapsing to zero. As the cost of thinking about when and where money should move, a long tail of money will stop sitting still.
15% of all the cash in the global economy sits still for months in $16T of unpaid invoices, because most businesses time payments on human heuristics: pay suppliers as late as possible, borrow instead of asking customers to pay early, only run collections from overdue customers.
At the same time, suppliers would happily take their money early instead of paying 20, 25, 30 percent or more a year in interest to a lender for money they are owed.
And buyers sitting on cash earning single-digit yield in money markets, would happily pay suppliers early if offered a discount that yields a higher implicit return on that cash.
Between 20%+ cost of money on one side and a 5% yield on the other lies a band of mutual benefit that exists in nearly every invoice. Yet for most B2B invoices, the time and cost of humans figuring out when money should move, and at what price, often exceeds the benefit of moving it.
So heuristics win. Suppliers borrow expensively against money they are already owed. Buyers hold cash defensively at high opportunity cost against bills they already intend to pay, and both sides pay for it. The win-win band of optimal payment evaporates, invoice after invoice, on $9 trillion dollars every year.
The last 20 years of accounts payable and receivable software did not fix this because the gap is not a workflow problem. It is a problem of two parties who cannot afford to think carefully about how to benefit each other on every invoice.
raft is making intelligent money available to businesses on our agent-to-agent network, with agents moving digital money in the form of stablecoins.
We give suppliers an accounts-receivable agent and buyers an accounts-payable agent, and the negotiations that never happened can finally happen—not in a meeting between a collections employee on one side and an account payables employee on the other, but between two agents, instantly, on every invoice.
The value unlocked for the supply chains we serve is enormous. Conventional net terms cost manufacturers roughly $600 billion a year in financing and opportunity costs across the Americas. Money that leaks out of supply chains and into capital markets.
For as long as there has been commerce, money owed and money paid have been separated by time. That time has had a gargantuan price tag on the physical economy.
The cost of intelligence has fallen below the cost of waiting and money will stop sitting still. raft is building the network that puts it in motion.