Uber tests a way to keep company cash earning interest over a weekend

Uber has shown that a company can keep its cash invested into part of a weekend and still pull it out when markets are closed. Uber, HSBC, Franklin Templeton, Tradeweb and Fireblocks announced the pilot results on Friday, Oct. 30. Uber earned about 1.5 extra days of investment yield compared with a standard sale schedule.

The weekend problem

Company cash faces a trade-off. Money placed in a money market fund, a fund that holds short-term investments, can earn a return. But turning it back into spendable cash can take planning, deadlines and settlement across institutions that run on different schedules.

Cash left in a regular bank account is easier to spend but may earn less. The gap is an opportunity cost that rarely shows up as its own line in financial reports.

What the pilot did

Uber used HSBC's tokenized deposits, which are digital versions of bank deposits, to buy tokenized shares of a Franklin Templeton money market fund. The purchase ran through Tradeweb. Fireblocks supplied the digital infrastructure and transaction controls.

The trades used delivery-versus-payment settlement, which means the investment and the payment change hands at the same time. Uber was able to sell part of its holdings outside normal trading hours, including over a weekend.

• Redemption proceeds went only to verified corporate bank accounts.
• HSBC's tokenized deposits are bank liabilities, so the system stays tied to regulated banking.
• Uber said the setup could reduce the need to keep large cash buffers.

What is not known

The size of the transaction and the financial return were not disclosed. This was a pilot, not a finished product that businesses can buy today. HSBC has said it plans to offer the capability to more U.S. corporate customers and add more investment options. The demonstration does not show the full process is available at scale.

Why it matters

Cash timing is a real concern for finance leaders. A PYMNTS Intelligence report found 77.9% of surveyed CFOs call improving the cash flow cycle very or extremely important for the year ahead. Another report found 62% of middle market finance executives have struggled to manage or scale cash flow forecasting.

If systems like this spread, companies could sort their cash more precisely into money that is truly idle and money that must be ready to spend, and earn more on the idle part.