Nvoicepay In Search Of Common Ground For B2B Payment Rails


One of the top stressors in B2B payments is the disconnect between how buyers want to pay and how suppliers want to accept payment. A recent study by Receivable Savvy found that 63 percent of suppliers prefer to be paid electronically, though not necessarily via commercial card. Researchers found that, while only 9 percent of suppliers cited a card as their preferred payment type, more than half said they accept cards because corporate buyers want to pay that way.

Amid this tension is the growing realization that the buyer-supplier relationship is a strategic one, and if these business partners are to be the most effective and profitable at their jobs, they must collaborate.

For some industry stakeholders, that means enticing suppliers to accept card payment. Doing so, they say, means they get paid faster and more securely, making it worth the cost associated with card acceptance.

But Karla Friede, CEO and cofounder of B2B payments firm Nvoicepay, told PYMNTS that getting suppliers to accept cards isn’t the right way to go about boosting electronic payments in the AP department.

“I think the solutions that are best give suppliers choice,” she said. “I don’t believe in forcing a payment type on anybody. I don’t think it works in the long run if your objective is to get to fully electronic solutions.”

Convincing a supplier to accept cards, she added, isn’t effective in improving the buyer-supplier relationship, either.

That’s Nvoicepay’s position, despite recently strengthening its support of commercial and virtual cards in B2B payments. The company has been working with Mastercard indirectly for several years to integrate Mastercard’s InControl for Commercial Payments platform and offer Nvoicepay clients access to virtual card solutions. Last year, Nvoicepay deepened its ties with the card conglomerate and formed a direct partnership with the company.

“As more businesses leverage virtual cards to execute and reconcile their supplier payments, we team with payment providers like Nvoicepay to help make business payments as simple and straightforward as consumer payments,” stated Mastercard Senior Vice President of Commercial Products Eugene DeSilva in a statement released yesterday (Jan. 18) to highlight the strengthened connection between the two firms.

Indeed, Nvoicepay’s Friede is a fan of commercial cards and of the virtual card in particular.

“The virtual card number is a really great technology when you have thousands of payments going out on a daily basis,” she explained. “It gives you visibility and control that you couldn’t get for those customers still using a p-card or plastic card, and surprisingly, today, there are a lot of people that still use a purchase card of some sort in their accounts payable department.”

Virtual cards are more secure, enabling a buyer to pay using a VCN for a specific amount of money at a specific time — making it more difficult for fraudsters to steal that number to purchase whatever they want. That “smaller risk footprint,” she said, combines with automatic reconciliation of payments and greater transparency in payment activity.

For corporate buyers, cards — and v-cards in particular — are a no-brainer. But that doesn’t mean a supplier will always be on board with a card’s interchange fees. Friede said that’s perfectly fine, though.

“Cards have been around a long time, and I believe that suppliers that accept them do so because it fits into their process,” she said. “Obviously, cards are more expensive to accept than ACH. But to the extent that suppliers find them easier to process, they’re willing to accept that.”

Other suppliers, however, aren’t so willing to bear that financial burden.

“Suppliers are smart,” she added, “and they should have a choice of what they want to accept. They will look at the benefits of all kinds of [payment technologies] they are accepting. I’m sure they’re weighing the benefits of the greater security of a card payment.”

What’s important isn’t convincing a supplier to accept a card payment, the executive continued; it’s about shifting the B2B payments landscape onto digital payment rails, regardless of what that rail might be.

An official partnership with Mastercard is certainly a mark of approval for the commercial card; Friede told PYMNTS that closer ties with the card giant will bring “new things to come” with regards to Nvoicepay’s support of commercial and virtual card payment. But it won’t take away from the company’s existing support of other payment rails, like ACH, wire and electronic check. And, in fact, Friede predicts that the use of cards – physical ones, at least – in B2B payments will gradually decline as other electronic payment rails take hold.

“I think cards in general will be around for a long time, but the percent of payments on plastic cards will decline over time as suppliers evaluate alternatives for how they choose to accept payment,” she said. “The virtual card is a much better payment vehicle for B2B than the classic purchase card. “