Invoices on Blockchain at EHDA
Euler Hermes Digital Agency (EHDA) is a fascinating company. It is attached to a +100 years old company, Euler Hermes, the leader in Trade Credit Insurance.I would refrain from saying that Trade Credit Insurance is known to be associated with disruptive innovation, and working for an +100 years old company doesn’t sound that exciting either. Yet, the first time I came in contact with them was at the Fintech Start Up Weekend, through the head of Digital Culture — Jan. We worked on a project called Sexy Bond; where we used Blockchain technology to improve bonding (this type of bonding).
After not winning the Weekend, Jan proposed me to help EHDA with their Data Science projects and the launch of the Data Science Center. This is when I met with the co-founders of the Agency, Louis Carbonnier and Christophe Spoerry. I discovered their grand mission : Reinventing Trace Credit Insurance. More broadly — reinventing Trade finance using the latest technologies: API, Big Data, Machine Learning, and Blockchain.
While working on the Big Data and Machine learning projects, I also advised on one of their experiments to explore the potential of Blockchain for invoice management. The objective of this experiment was to enable companies to upload their invoices to an “admin” Smart-Contract hosted on the Ethereum Blockchain. This contract would then create a “Smart-Invoice”, i.e. an independent smart-contract that would represent the invoice, so that every interaction with the invoice would be registered on that smart-contract. The “admin” Smart-Contract would then supervise the different invoices created and in case of a non-paid one, can alert companies that one of their buyers is having difficulty paying their bills.

Though this experiment may seem rather naive, it serves a good purpose — illustrating the power of Blockchain to our corporate colleagues as well as stepping into the Blockchain field. More details on this experiment can be found here.
Smart Invoices and Insurances
After helping setting up a fully functional Data Lab, I was offered the possibility to focus on developing Blockchain experiments and spreading the Blockchain culture into the company! Building upon the previous experiment I redesigned the idea of Smart-Invoices while keeping the core concept. In this design, the “admin” Contract is no longer needed. Each Smart-Invoice is completely independent and generates a series of events : Approved, Paid, Late. Companies can follow the statuses of their invoices, approve them, pay them, modify them or delete them directly through the Smart-Contract (or through the simple web interface we provide). The cool aspect of this design, is that we can now register any type of service to the Invoice, thereby enabling those services to simply listen to the events generated by the invoice and execute the related actions.
One example of this design is a TCI Smart-Contract, called “Smart-TCI”. It works as follows :
- a Smart-Invoice has been created
- the seller can ask for a TCI through the Single Invoice Cover API (another product spawned from EHDA, providing TCI in real-time, invoices by invoices)
- he is then notified how much premium he has to pay to activate the Insurance,
- and once the payment is done, a smart-contract representing the TCI is created.
- This “Smart-TCI” registers to the events of the Smart-Invoice, and waits for the different events to be triggered.
TCI is just one example of a type of service that can be attached to the Invoice. We can imagine developing other types of services such as: for refactoring purposes, attaching loans to an invoice, or even creating securities from invoices therefore allowing them to be traded like any other financial product.
Though currently there are some drawbacks to our solution due to limitations of this specific Blockchain technology, such as invoice information being available to everyone. We are already studying solutions for invoice information to be hidden from everyone using different Blockchains such as Quorum or using zero-Knowledge Proof and Proof of Process.
Conclusion
The trade finance revolution has begun. Blockchain technology has opened vast opportunities, and we, at EHDA, are eager to be at the forefront of this revolution and explore and tap into all of its promises. We believe that by being a major actor in the Trade Finance Industry - we can create immense opportunities for the industry and energize the market.
