Produce Pay Offers a New Financial Option for Growers and Shippers Alike
LOS ANGELES, CA - One of the risks in the fresh produce industry is what happens when the fruits and veggies are in transit. Reportedly, a grower typically has to wait 30 to 45 days after sending it off to see payment, unless the shipper trusts the product and pays a portion while it is in a figurative limbo. Produce Pay is a new company and concept that seeks to alleviate that transition for both sides.
“Ultimately we are a financial service company specifically focused on the produce industry,” Founder and CEO Pablo Borquez Schwarzbeck tells me. “I think it’s a very honest industry. I've always felt very endeared to it, and finding new ways to do business is really what this is all about.”
To learn more about Produce Pay, you can watch the company's short video below:
Pablo has produce in his blood. The fourth generation of a farming family in Sonora, Mexico, he knows all too well the difficulties distributors and growers face financially while fresh produce is in transit. But it was while working to receive his MBA in Managerial Finance at Cornell University that he came up with a strategic solution.
“I grew up on the farming side and I saw that cash flow was always a huge problem for farmers,” he said, explaining that the system the industry has fallen into puts a lot of weight and responsibility on the shippers. “Shippers are not a financial company, and it’s a lot to expect them to take on that risk.”
He saw a need in this traditional system, and when he met like-minded people at Cornell with farming and financial backgrounds he found a way to make it better. “We developed a software that can give us the market prices with or without an invoice. Based on the monetary value, we can fill the growers financial needs the next day without putting that pressure on the shipper, and the farmer can have that security.”
An important point Pablo made to me is that Produce Pay is not a bank and does not operate as one. Instead, it acts as an investor that shares the financial risk with the growers and shippers to help alleviate both while the product is in transit, never actually possessing the produce.
Because Produce Pay is a payment tool, when liquidation occurs it is paid through its system. After a 1 to 1.5% service charge, depending on the situation, full payment is wired to the grower.
“I grew up in the industry, I’ve seen how things are being done. The possibility to change an old problem in a traditional industry I love, to find new and better solutions and help promote it, that’s what it comes to in the end,” Pablo said.
Though it’s been in the making for a while, Produce Pay was officially incorporated in December of 2014, working with growers in Mexico and distributors in the U.S. Now it has the resources to expand.
To find out more about getting involved with this new approach to produce shipping, check out the company’s website here.