Discover Financial Services is pushing for digitization of B2B payments in the U.S. through a collaboration with the Business Payments Directory Association (BPDA), according to a press release.
The companies said Discover will be working with the BPDA, recently formed to create a business payments directory to make it easier for payers to electronically make B2B payments, to create a blockchain-powered platform.
As the BPDA develops its B2B Directory, the company said it aims to create the solution as a “standardized, searchable database” of information to make it easier for businesses to pay suppliers electronically.
The partners will begin work on the creation of a proof of concept this month, and are expected to continue that phase of the project into 2019.
In a statement, BPDA chairman Lawrence Buettner pointed to ongoing use of paper checks in the U.S. for B2B transactions.
“While electronic payments are a preferred payment choice for businesses, they are challenged with finding and accessing electronic payment information to execute payments,” Buettner said. “Our B2B Directory will not only provide access to this information, but support routing instructions, preferred payment methods, remittance details, delivery preferences and more — all in a standardized way clearing the path for interoperability and greater efficiencies.”
Data stored on the directory will be managed by credentialed service providers. Payees can manage their own payment preference data in real time, the companies explained.
The BPDA will use API technology and blockchain; the company is working with the API Standardization Industry Group, a NACHA-sponsored organization supporting standardization of APIs in the financial services industry.
NACHA Managing Director of Network Development and Strategic Initiatives George Throckmorton, who is also the API Standardization Industry Group’s lead, said in a statement that API standardization that supports B2B payments is a “priority” for the organization.
In another statement, Discover Head of Global Business Development Joe Hurley said the creation of the B2B payments directory will enhance efficiency, reduce costs and boost productivity.
“By supporting efforts like the B2B Directory, Discover can bring efficiency to the payables and receivables processes of our business clients, helping them expand reach and seize new opportunities.”