Categories: B2B Payments

M&A, Open Banking Drive Commercial Card Innovation

As commercial card innovation expands, service providers continue to target particular pain points for their business cardholders.

This week’s look at the latest initiatives driving corporate card adoption finds an array of strategies innovators deploy to add value to their offerings, from wielding open banking to nix the pain of bank switching, to collaborating on risk mitigation to nix the friction of personal guarantees, to embracing mergers and acquisitions (M&A) to strengthen corporate card infrastructure.

Archa Collabs With i2c in Australia

Australian corporate card provider Archa announced a collaboration of payment and open banking technology firm i2c to debut a new corporate credit card program in the country designed to address key pain points for small and medium-sized businesses (SMBs).

Together, the companies are rolling out an offering that arms SMBs with commercial cards without the need for a personal guarantee, according to a press release. Designed for firms with between two and 200 employees, the card program underwrites SMBs through Archa’s proprietary machine learning-powered risk analysis technology. Through integrating with companies’ existing business software, the cards can promote deeper visibility into employee and company spend, the firms noted, adding that Archa will wield i2c’s platform to enable businesses to set spending rules and limits for employees to streamline the expense management process.

The partnership with Archa follows i2c’s previously-announced partnership with Airwallex, a tie-up that sees i2c powering payment processing for Airwallex’s cross-border corporate card the Airwallex Borderless Card for B2B payments, a tool that focuses on optimizing global spend with foreign exchange (FX) fees for businesses in an effort to drive commercial card adoption for cross-border payments.

Payhawk Explores Open Banking’s Biz Card Opportunity

In a recent conversation with PYMNTS, Payhawk Co-founder and CEO Hristo Borisov explored the opportunity for open banking to expand commercial cards’ value proposition for businesses.

Today, European corporates are gradually expanding their adoption of corporate cards but are often held back by the challenge of having to switch bank providers in order to obtain the card program that best suits their needs. Payhawk is able to operate in unison with businesses’ existing bank accounts, however, thanks to Europe’s PSD2 and open banking regulations.

“It offers a much more flexible, integrated experience because of open banking regulations in place in Europe,” said Borisov. “For organizations, switching conventional banks can be quite challenging — they’re using a huge amount of services from their existing banks.”

Borisov spoke with PYMNTS on the heels of Payhawk’s announcement of a $3.23 million funding round led by Earlybird’s Digital East Fund, while TinyVC and other industry experts also participated.

Brex Goes on Acquisition Spree

This week, corporate card startup Brex announced the acquisition of three companies to strengthen its card offering.

The takeover targets include Neji, which focuses on business security and networking using blockchain; Compose Labs, which targets next-generation video technology; and Landria, a company that develops internal knowledge databases.

The financial details of the deal were not made public, although Brex noted the buyouts aim to protect customer data and strengthen its core infrastructure.

“Brex is committed to helping growing businesses scale, especially in challenging environments,” said Brex Co-Founder and Co-CEO Henrique Dubugras in a statement. “We look forward to bringing the talented team members at Neji, Compose Labs and Landria onto the Brex team.”

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The pressure on banks to modernize their payments capabilities to support initiatives such as ISO 20022 and instant/real time payments has been exacerbated by the emergence of COVID-19 and the compelling need to quickly scale operations due to the rapid growth of contactless payments, and subsequent increase in digitization. Given this new normal, the need for agility and optimization across the payments processing value chain is imperative.

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