TReDS platforms give businesses the power to manage their cash flow by connecting them to a network of financiers who can discount invoices at competitive rates. This means that businesses can convert their unpaid invoices into quick cash by connecting them with financiers who are willing to pay upfront. There have been industry discussions about expanding TReDS to include export receivables in the future, especially for MSMEs.
What makes TReDS special is that RBI regulates it, which means these platforms operate with the highest standards of financial regulation. Currently, there are only 5 RBI-approved TReDS platforms available in India, though there are other supply chain finance platforms (like Drip Capital) that can discount invoices.
This article compares the various TReDS platforms in India and explains how they work, their rates, and how to choose the right one. Firstly, let’s begin with:
The Trade Receivables Discounting System (TReDS) is a digital platform to help businesses, especially MSMEs (Micro, Small and Medium Enterprises) in India, to unlock immediate cash from their unpaid invoices. By allowing businesses to discount their receivables, TReDS enables companies to get working capital without having to wait for long payment cycles from their customers. This system plays a crucial role in improving the financial liquidity and operational efficiency of businesses.
The process of using a TReDS platform can be broken down into a few simple steps:
In summary, TReDS is a win-win for businesses, buyers, and financiers. For the Indian economy, this is financial inclusion, liquidity, and growth, and is a must-have for businesses looking for flexible and fast working capital.
The Reserve Bank of India (RBI) regulates TReDS platforms to ensure security and fairness in the financing of trade receivables. As of now, 5 platforms have received RBI approval to operate in India. These platforms allow MSMEs to get their invoices financed by a wide range of banks and NBFCs in a competitive, auction-driven environment.
Each platform has its own strengths – from tech-driven user experience to deep corporate networks or aggressive financier participation. Here’s a breakdown of each one so you can decide which is best for your business:
Launched in 2017 as a joint venture between SIDBI and NSE, RXIL was India’s first operational TReDS platform. It is a neutral digital marketplace for MSMEs to sell their receivables to financiers.
Features:
Platform Fees (Flat or Tiered): Not publicly disclosed; varies with transaction size and participant type
Registered MSMEs: 25,000+ MSMEs onboarded
Registered Corporates: Specific numbers not publicly disclosed, but includes major PSUs and large buyers
Transaction Volume: ₹1 lakh crore+ (as of May 2024)
Average Discount Rate: Depends on buyer’s credit profile; not officially published.
Financiers: Data not specified; includes leading banks and financial institutions
M1xchange is known for its robust digital platform, built on a scalable architecture and backed by HDFC Bank. It has been one of the most active players in the TReDS space in terms of both volume and user adoption.
Features:
Platform Fees: Not publicly disclosed.
Registered MSMEs: Over 31,000 (as of early 2024)
Registered Corporates: 412+ active corporate buyers (as of Feb 2024)
Transaction Volume: ₹1 lakh crore+ (cumulative, as of May 2024)
Average Discount Rate: Ranges from 7% to 11% p.a., depending on buyer's credit profile
Financiers: Around 60 banks and NBFCs actively participate
3. Invoicemart
A joint venture between Axis Bank and mjunction, Invoicemart brings both financial expertise and platform agility to the table. It’s particularly strong in metro markets and large industrial sectors.
Features:
Platform Fees: Platform charges apply; offers a calculator for users to estimate fees based on tenor and invoice value
Registered MSMEs: 1,300+ (as of Jan 2019; newer data not disclosed)
Registered Corporates: 100+ (as of Jan 2019)
Transaction Volume: ₹2,000 crore+ (as of early 2019; newer data not available)
Average Discount Rate: Not publicly disclosed, but similar to industry range (approx. 7%–10%)
Financiers: Data not disclosed publicly
C2treds, backed by global early-payment platform C2FO, brings international experience and efficiency to Indian invoice financing. It’s newer compared to others but is gaining traction through ease-of-use and innovative structuring.
Features:
Though not originally a TReDS player, KredX launched DTX as its TReDS arm after receiving RBI approval. It aims to combine its deep roots in invoice discounting with the regulatory trust of TReDS.
Features:
These RBI-approved TReDS platforms bring a unique approach to invoice financing. Choose the right one based on your buyer profile, industry type, and transaction speed. In the next section, we’ll compare them side-by-side so you can choose what’s best for your business.
Note: The data for C2treds and DTX (KredX) is currently limited in the public domain. For the most accurate and up-to-date information, it's advisable to contact the respective platforms directly.
While all TReDS platforms offer similar core functions, the differences in their networks, technology, and services can make a big impact on your operations.
A platform’s network of buyers and financiers plays a big role in how quickly your invoices get financed. Larger platforms like M1xchange and RXIL have a bigger network which means your invoices are more likely to get discounted quickly at competitive rates. If your major customers or financiers are already on a particular platform, it makes sense to be on the same platform.
The technology offered by a TReDS platform should be easy to integrate with your existing systems and workflows. Look for features like bulk invoice uploads, API integration and user friendly interfaces. Platforms with robust technology support will reduce manual efforts and increase efficiency especially for businesses that handle large volumes of transactions.
Some TReDS platforms have strengths in specific industries or customer bases. For example, Invoicemart and RXIL are good for businesses involved with public sector undertakings or government contracts, while platforms like C2TReDS and DTX (KredX) are better suited for private sector businesses. Consider which platform aligns with your business’s core customer and supplier relationships.
You can register on more than one TReDS platform which can be beneficial if you have multiple buyers and financiers. While this increases the chances of finding a financing option, businesses need to be mindful of managing multiple platforms and ensuring compliance across all systems.
To summarize, start by identifying your key buyers and checking which TReDS platform they’re already on. From there, choose the platform that gives you the best mix of speed, coverage, and cost. TReDS can be a real cash flow advantage when approached correctly.
Registering on a TReDS platform is easy but requires proper documentation and verification. Here’s a step-by-step guide for MSMEs and corporates to register and start transacting:
Start by selecting the TReDS platform that suits your business needs—consider where your buyers or suppliers are already registered, and the platform’s ease of use and financier network.
Visit the platform’s website and start the registration process. You’ll need to provide your basic business details:
Most platforms ask for standard KYC and business verification documents:
Once you submit your documents, the platform will do internal due diligence. This may include verifying your Udyam/MSME status, checking credit profiles, and confirming banking relationships. Some platforms also do in-person or video KYC for added verification.
If all documents are in order, most platforms approve MSME registrations within 3–5 working days. For larger corporates, it may take 7–10 days depending on the volume of data and internal approvals required.
Once approved, you can start uploading invoices, accepting or rejecting trades, and participating in auctions. Most platforms also offer onboarding support or training for your finance team.
While registration is free on most platforms, make sure you understand the transaction fees and ongoing compliance obligations before signing the user agreement.
TReDS has changed the way Indian MSMEs access working capital. By providing transparent, auction-based invoice discounting from a network of financiers, it reduces dependence on traditional bank credit and improves liquidity without adding to the balance sheet. For MSMEs with long payment cycles, understanding TReDS platforms is essential.
Going forward, the TReDS ecosystem will only evolve. As regulatory awareness increases and large corporates adopt TReDS, we can expect more participation, deeper integration with government initiatives, and better credit insights driven by analytics.
1. Can I use multiple TReDS platforms?
Yes, you can register and transact on more than one TReDS platform. If your buyers are on different platforms, or you want to compare discounting rates across financiers.
2. How much to register on TReDS platforms?
Registration is free for all MSMEs on all TReDS platforms. However, documentation and KYC compliance is mandatory for onboarding.
3. Which businesses can use TReDS?
All MSMEs (as per Udyam registration), corporates (public or private), government departments, and PSUs are eligible. Buyer must be a corporate or government entity; seller must be an MSME to initiate invoice discounting.
4. Is there a credit check?
Yes. While MSMEs are not subject to deep credit evaluation, buyers and financiers are evaluated to determine credibility. Some platforms may do basic background verification or rely on credit ratings of buyers to determine discounting terms.
5. Is TReDS mandatory for buyers?
TReDS is not mandatory by law for buyers but RBI has directed all major PSUs and large corporates with turnover above ₹500 crore to onboard at least one TReDS platform to support MSME vendors.
6. Can exporters use TReDS?
TReDS is designed for domestic trade receivables. International export invoices are not covered under TReDS as of now but there are plans to enable it in the future.
7. What are the credit checks?
Credit checks are generally on the buyers (i.e., the ones who will pay the invoice). Financiers evaluate the buyer’s credit profile, payment history and financial health to decide to finance an invoice. MSMEs may be subject to basic due diligence and verification.
