There’s no disputing that the pace of innovation in consumer payments over the last several years has been quick and its reach broad. There’s been an abundance of innovation in where consumers shop, what they use to pay when they buy and the devices they use to enable those payments. Along with an appetite for both consumers and merchants to embrace these new ways to pay in an effort to drive more commerce opportunities and improve the merchant and customer experience.
There’s also no disputing that the pace of innovation on the commercial side of payments has been largely quite the opposite. While there have been an array of point solutions aimed at digitizing the lending, invoicing, payables and receivables process for buyers and suppliers, they’ve been just that: point solutions that lack scale, or that look at commercial payments pain points holistically from a supply chain perspective, and for which inertia on the part of buyers and suppliers remains the biggest competitor to change.
“There is an opportunity [in commercial payments] that we, as an industry, haven’t spent enough energy focusing on,” Vicky Bindra, Visa’s head of Global Products and Solutions, told Karen Webster in a recent conversation. “But we’ve invested a lot of energy over the last year rethinking how commercial payments pain points have always been addressed, then creating solutions that go well beyond what we’ve done in the past.”
The public culmination of that year-long process is the Visa Ready Program for Business Solutions, which launched yesterday and makes the integration of Visa’s B2B solutions simple, quick and efficient. These solutions span the gamut of B2B payments’ needs — virtual cards, accounts payable automation and data analytics, to name but a few. But what Bindra says makes Visa’s approach to commercial payments innovation unique is its philosophy for designing and then getting those innovative solutions to market at scale — securely and reliably.
That, he said, is done by creating an ecosystem of technology providers whose solutions are vetted by Visa and can be made available through Visa’s 14,000 issuers to the businesses that want and need them. Bindra says an ecosystem approach not only preserves optionality for both issuers and businesses to match the right solution to the right business problem, but makes it possible to innovate commercial online payments across the entire corporate payments supply chain in a much more holistic, end-to-end fashion.
“We don’t take every partner to every issuer — nor would we want to,” Bindra said, explaining that it has to match what the issuer and its business portfolio wants and needs. When they do, it also means making sure that the connection is also Visa-ready, so to speak, so that time-consuming and expensive integrations between those technology suppliers and Visa issuers can be avoided. Bindra explained that may mean integrating some of these solutions directly with Visa or via a processor.
Raising the Level of the Game
Bindra said that although some issuers have gotten relatively comfortable with solutions like virtual cards, their use is concentrated in narrow contexts such as travel and healthcare, and the progress has been slow.
The internal processes set up to enable these digital payments methods on the corporate side can also be lacking.
“In some cases, to use a virtual card to book business travel, the confirmation phase of the transaction actually has to be done by fax so an electronic payment can be made.”
And while clearly that makes little sense, the “we’ve always done it this way” mindset can limit the way issuers think about innovating the corporate payments experience. That’s where Bindra says Visa Ready and its ecosystem’s focus has its advantages.
“If you look at the consumer side, there has been advancement in mobile payments, push payments, voice-activated payments and P2P. We have looked closely at how those innovations can be applied in a meaningful way on the commercial side of payments. You will start to see us directly connect those innovations with solutions that can materially change the entire commercial payments flow,” Bindra noted.
Bindra hinted that it also means rethinking how payments are made — thinking push and not pull payments, for instance, or using voice in commercial payments use cases where transactions are repetitive. “There’s a commerce payments path here if we can think creatively about how these channels and media can be used in new and different ways.”
Changing the B2B Conversation
Bindra said that some of the blame for the lack of progress overall in commercial payments innovation lies at the feet of the industry that has gotten perhaps overly focused on pricing, which often dominates many B2B payments conversations, particularly on the supplier side. Bindra said that part of the work of he and his team is to evolve that conversation beyond just the payment itself to more about how improving efficiency in payments makes supply chains run better, disbursements flow faster and data more secure.
A conversation that its current crop of Visa Ready partners are more than ready to do. Today those partners include Bottomline Technologies, CSI globalVCard, MineralTree, Bora Payment Systems and Priority Commercial Payments — but the goal is to extend its partners more widely — and quickly.
Those partners, Bindra noted, bring with them solutions to use cases that innovate the way things buyers and suppliers always paid or were paid for, and also help lay the groundwork for rethinking the business models that underpin the corporate payments supply chain.
All part of what Bindra said is Visa Ready for Business Solutions’ goal — to give issuers easier access to an ecosystem of innovators and innovative solutions that can reinvent and change the commercial payments game for issuers and the business customers they serve.
Also important to that effort, Bindra shared, is assembling a world-class team of commercial payments experts. New to Visa’s Commercial Payments group is ex-Citi exec Taira Hall as the head of the partnerships team and former Bank of America head of commercial payments Kevin Phalen, who will lead the team.