In the B2B realm, payments travel anything but a straight line. Transactions between buyers and suppliers wind down roads that curve, that twist and turn and sometimes lead to dead ends amid manual processes, paper checks and even faxes.
Online, though, payments can travel the straight and narrow, especially across platforms that link supply chains in a marketplace setting.
To that end, Visa and Billtrust said last week that JPMorgan Chase has joined the Visa and Billtrust Business Payments Network (BPN), with an eye on streamlining B2B payments for commercial users. Since the November 2018 launch, nearly $2 billion in virtual card payments for suppliers have been automated.
The move follows the announcement late last year that Visa and Billtrust had launched the open buyer/supplier payments platform in a bid to speed transactions while protecting the data tied to those payments.
JPMorgan, for its part, said last week that joining the network ties in with the banking giant’s continued investment in its Single Use Accounts card-based solutions.
The announcement also comes against a backdrop where, writ large, there is significant room for automating B2B payments. Consider the fact that more than half of firms use manual data entry processes when it comes to payments – and yet a majority of those firms, at 71 percent, say that manual methods represent pain points in accounts payable operations.
Billtrust said last week that it has thus far eliminated 55,000 hours of manual data entry, processing and invoice matching for companies across the BPN through the integration of Billtrust’s Virtual Card Capture and Visa’s Straight Through Processing Solution. Virtual Card Capture, the companies said, routes information such as payment instructions to Billtrust.
In an interview with Karen Webster, Taira Hall, vice president of U.S. Partnership and New Initiatives at Visa, said that by signing on to BPN, JPMorgan is addressing a major pain point for its corporate clients. That pain point stands as among the largest challenges in B2B payments: the lack of connectivity between existing far-flung accounts payable and receivables platforms.
“There’s just a tremendous chasm between them,” she said. Payments, she said, “takes too long, and we have to reduce the amount of time and also offer more options around payment themselves.”
BPN’s goal, she added, has been to route electronic payments for corporate buyers to their suppliers, and to offer up those options, spanning dynamic discounting and setting the stage for buyers and suppliers to negotiate and navigate their relationships on their own terms.
“It’s a level of standardization that we can bring to the ecosystem,” she said of BPN. “But what has become even more meaningful is that we’ve been trying to elevate the [payment] preferences of those suppliers — to give a voice to those suppliers and create a solution that facilitates acceptance all around.”
Flexibility and choice will accelerate the adoption of digitized payments, she said, extending well beyond card based payments.
The B2B payments sector is ripe for innovation, said Hall, and is increasingly taking a cue from the consumer side of payments. There, transactions flow with relative ease across marketplaces. Millennials, she noted, are becoming more accustomed to the Amazon experience – which in turn informs their expectations for how corporate payments should be handled concerning procurement.
“With all of those trends and the work that Visa is doing at the network level with several FinTechs,” she said, “the time is now to bring unique user experiences into the B2B ecosystem and create a catalyst for change.”
The JPMorgan announcement, she said, comes as Visa has seen a strong pipeline of interest from other financial institutions that she termed “leading players in commercial payments … and we are also seeing interest from AP platforms themselves.”
Getting a bit more granular about the process, Hall said that Visa is helping to capture the payment information directly from the supplier, and uploading, directly onto BPN, what their payment preferences may be, and payment terms
Of Visa, said Hall, “we are very focused on data, at the network level, with many of these partnerships … and on financial and transactional data.”
The data flows across what Hall said is “a directory-like service that can be accessed by buyers” through their financial institutions and accounts payable platforms in order to facilitate payments and have electronic access to those payment preferences.
On the supplier side of the equation, she continued, BPN’s goal is to deliver what might be thought of as touchless transactions, where processes are simplified and costs reduced as data is reconciled into suppliers’ ERP systems seamlessly.
In this way suppliers avoid the significant cost incurred when converting their buyers to specific payment methods. Suppliers can reallocate time and effort to growing their business, said Hall, and drive revenues rather than being focused on back-office functions.
Think of it as a highway that links payors to payees, she said, and a first of its kind.
“It’s the first supplier-driven B2B payments network,” she said.