Byppay cuts invoice debt 53% using path-enabled clearing on graphs
New algorithm clears EUR 10.6B in invoices without needing cycles...
Late payments and liquidity stress choke small-to-medium enterprises. A new paper from Peplluis de la Rosa Esteva and Sai Srikanth Madugula introduces Byppay, a path-enabled clearing framework for invoice-backed trade networks. Unlike traditional cycle-restricted netting—which can only settle debts within directed cycles—Byppay reduces obligations along open chains while preserving each node’s net position. The result is a post-settlement state combining a residual invoice graph with a settlement instruction layer, enabling far greater debt relief.
Testing on the 2021 IMI invoice corpus (133,191 invoices totaling EUR 19.67 billion), Byppay achieved EUR 10.60 billion in debt relief (53.87%), versus EUR 4.13 billion (20.99%) from cycle-restricted netting. The framework also supports selective disclosure and distributed coordination, making it deployable in real-world supply chains where data privacy matters. This could transform how firms manage working capital and clear intercompany debts without central authority.
- Byppay resolves debts along open invoice chains, not just cycles, achieving 2.5x more relief than traditional netting
- On EUR 19.67B in real invoices, Byppay cleared EUR 10.6B vs. only EUR 4.13B for cycle-restricted methods
- Framework preserves net node positions and enables selective disclosure for privacy in distributed supply chains
Why It Matters
SMEs can unlock EUR billions in stuck capital using graph-based clearing, no central ledger required.