Banks Keep Vendors In AP Automation Conversation

The convergence of accounts payable and accounts receivable has led many in the AP automation industry to begin turning their attention to the supplier.

After all, even if B2B buyers wanted to embrace electronic payments and automated payment technologies, B2B payments digitization will surely stumble unless B2B vendors are able to accept ePayments and integrate those automated processes into their own back-office processes.

In the latest PYMNTS Next-Gen AP Automation Tracker, a collaboration with Bottomline Technologies, Uma Wison, UMB Bank executive vice president and director of product management, noted that supplier acceptance is critical to embracing electronic B2B payments — and must be a part of the AP conversation.

“The conversation to be had is, ‘Your supplier is accepting other means of more viable and more automated payment options from other providers,’” she said. “That’s the talk we’re having with our AP clients.”

Barclays Highlights the Buyer-Supplier Relationship

A new report from Barclays suggests that this focus on the vendor wouldn’t only be beneficial to the accounts payable service providers vying for their solutions gain traction. Indeed, according to research from Barclaycard Commercial Payments published earlier this week, companies’ focus on supplier needs — and enhanced vendor relationships — are a strategic and mutually beneficial initiative.

According to the report, the majority of businesses surveyed said they’re looking for longer-term supplier relationships today than they were five years ago, and three-quarters said they communicate openly with their vendor base about business goals.

Increasingly, companies are concerned as to how late payments to their suppliers might impact their reputation as a corporate customer, too, and although respondents said they pay their vendors on time 73 percent of the time, businesses pointed to slow internal processes as a key factor behind missing payment deadlines.

“It’s encouraging to see that U.K. businesses are looking to develop longer-term and more collaborative supplier relationships, built on trust and transparency,” said Barclaycard Commercial Payments CEO Marc Pettican in a statement. “However, in order to achieve this, it is vital that they have access to tools and systems that help them communicate with service providers effectively.”

With this in mind, Barclays became the latest financial service provider to introduce a new corporate payments service designed with the vendor in mind.

Dubbed Precisionpay Hub, the tool is a platform to connect buyers and suppliers directly for more seamless invoice payments and simplified procurement processes. According to Barclays, the tool aims to not only make it easier for businesses to pay invoices, but to reduce Days Sales Outstanding (DSO) cycles for vendors.

This past week, there were other accounts payable service providers that similarly brought the industry’s attention to vendor needs.

Visa’s Vendor Focus Down Under

Visa, for instance, announced a collaboration with Australian B2B payment company Payment Logic to debut a new service, Yak Pay. The tool is an accounts payable offering allowing businesses to pay their suppliers via Visa commercial card.

Cards often demonstrate the importance of keeping the supplier in mind when developing accounts payable solutions. Although buyers may want to use card products, many vendors prefer not to accept the interchange fee, or cannot afford to upgrade infrastructure to accept the payment method.

Visa and Payment Logic pointed to those challenges, explaining that Yak Pay will focus on enabling vendor acceptance of electronic payments, although the companies did not explain exactly how they would do so.

“Cash is still prevalent among small businesses, as many suppliers don’t accept digital payments,” said Visa Head of Merchant Sales and Acquiring for Australia, New Zealand and South Pacific Dan Parsons in a statement. “This can be stressful and time-consuming for the owners and managers of these businesses, and we know that many prefer the security, convenience and record-keeping capabilities offered by credit and debit products.”

WEX Eyes Vendor Acceptance in UAE

Commercial payments company WEX said this week it is expanding in the United Arab Emirates, collaborating with Mastercard to issue virtual cards in the market.

Targeting travel supplier payments, the initiative is part of WEX’s broader move to expand in the Middle East. And while its launch in the UAE indeed focuses on businesses being able to use v-cards to pay their suppliers, the company did point to payment acceptance as a key focus of its solution.

In its announcement, WEX said its virtual card offering will support payers’ cash flow management and “improve acceptance and strengthen relationships with suppliers such as hotels, car rental companies, tour operators and destination service providers.” Again, however, WEX did not provide details into its strategy to support supplier acceptance of v-cards.