Polished shoes and nice jacket? Check. Laptop? Yep. Business cards and document pouch? Got it. Company-issued plastic? Ha! Who needs that?
A successful business trip depends on preparation, and that includes payments. According to Bank of America’s new vision of the future, those trips — and other B2B payment activities such as buying supplies — would go much more efficiently if plastic was replaced by mobile wallets.
In a new PYMNTS interview, Karen Webster talked with Hubert J.P. Jolly, head of financing and channels in global transaction services at Bank of America Merrill Lynch, about the financial institution’s latest product launch: adding mobile wallet functionality to its suite of commercial card products.
“We are really just following a consumer trend,” he said.
Mobile Wallet Tool
In the financial institution’s (FI's) view, mobile wallets can enhance payment security by tokenizing account numbers, effectively using a physical commercial card to generate a virtual card for a particular purchase. That virtual card number is not stored and can only be used for that transaction. Further, mobile wallet solutions often require an additional layer of security in the form of biometric authentication or passwords to confirm the identity of the payer.
The launch of the bank’s B2B mobile wallet functionality comes at a time when, Jolly told Webster, “contactless around travel (purchase) is becoming more accepted.” In fact, recently released research projects that contactless payments will be worth more than $1 trillion in 2018 — a year sooner than anticipated. In two years, overall transactions made via in-store contactless payments will account for 15 percent of point-of-sale (POS) transaction volume, worth $2 trillion.
Not only that, but “mobile wallets are becoming more common in stores, to buy supplies for your business,” he said. Indeed, Jolly wondered if “maybe we should have done this a few years back.”
Mobile Wallet Growth
Few would argue that mobile wallets have yet taken the world by storm. But some trends offer optimism for backers of the payment method.
Convenience store chain 7-Eleven now takes Google Pay and Apple Pay at most of its U.S. locations. The new options are in addition to other mobile payment choices the chain offers, such as Samsung Pay. Other financial institutions, though, have followed the wave — PNC Bank has already said it is linking its corporate clients with a new mobile solution that links users of its Visa commercial cards into mobile wallet solutions Apple Pay, Google Pay and Samsung Pay.
“We’ve been asked a few times by clients if we had mobile wallets,” Jolly said. After running a proof of concept (POC) on the mobile wallet B2B functionality, the financial institutions was able to engage “rather quickly” with its corporate clients to determine if “this was something they would like or not. Right away we got a lot of support,” he explained.
Corporate treasurers, cash managers and travel supervisors might also like the solution, assuming it makes expense reporting and payouts more efficient. Of course, every new tool has its potential downsides, and for mobile wallets, the risk is similar to that of the plastic company-issued credit card: employees might accidentally use it for personal expenses — in the case of the mobile wallet B2B tool, by leaving that as the default setting on that person’s phone.
“That’s going to happen, and most companies have a process to deal with it,” Jolly told Webster.
B2B Payments Innovation
The launch of Bank of America’s B2B mobile wallet capability comes after the financial institution’s launch of a mobile app for customers using corporate prepaid cards. The app allows business users to view card balances and transaction data, locate an ATM, and suspend or activate prepaid cards, among other functions. The FI had also previously released biometric authentication capabilities for its corporate mobile banking customers.
When it comes to ongoing and future B2B payments innovation, Jolly said a general push involves more integrations and “single implementations” that enable commercial banking clients to simplify their payment and expense processes instead of dealing with multiple “silos.” Much of the push for that B2B innovation will have to come from buyers, he said, who have more incentive than suppliers to enact changes that can be costly and time-consuming. If a buyer decides to change payment methods, after all, the company getting paid has little room to complain or protest.
For now, though, the take-up for mobile wallets for B2B payments, whether for travel or buying supplies, will signal just how far that part of the payments world is willing to change.