With the global pandemic creating a market of volatility, corporate spend is down as businesses look to safeguard their bottom lines against macroeconomic headwinds.
The business travel arena is another area of major spend reduction, with Amazon revealing that it has spent $1 billion less in travel expenses since the coronavirus crisis hit, CNBC said in a separate report. Former American Airlines CEO Robert Crandall told The Wall Street Journal that business travel volumes will never recover.
For some organizations, this may be good news for the bottom line. But for the commercial spending technology world, these forecasts aren't exactly rosy.
This earnings season, the downturn has become apparent as several corporate payments technology players post losses. But the slump isn't across the board, and indeed, industry organizations are already showing signs of a bounce back. What's more, the market lull may offer a moment to focus on innovation for the future as commercial payment habits shift — perhaps permanently.
Duke Chung, co-founder and CEO of corporate travel and expense management firm TravelBank, told PYMNTS, for example, "Not having a lot of travel in our industry right now gave us a lot more time to innovate and think about where the future is."
The latest earnings results further drive this opportunity home.
"While we expect near-term economic uncertainty to persist, we're very excited about the long-term opportunity," said John Rettig, chief financial officer at Bill.com, speaking during the company's earnings call Thursday (Nov. 5). "And we will continue to invest and innovate to support [small- to medium-sized businesses] SMBs, while remaining diligent and agile about the need to respond quickly to changes in the macro environment."
Virtual Cards And Mobile Technology
Bill.com revealed some of those changes as it highlighted the innovations driving a solid first fiscal quarter. While losses climbed from $5.7 million in Q1 of last year to $13 million in Q1 of this year, the company still managed to beat analyst expectations.
That can be attributed, in part, to the company's virtual card investments, according to Rettig, with the company's ability to support supplier virtual card acceptance "starting to pay off earlier than expected in the quarter.”
The pandemic's influence on the virtualization of the commercial card has been evident for TravelBank, too, with Chung telling PYMNTS that the ability for virtual cards to support contactless payments via mobile wallets is driving the future of business travel and spend.
Mobile is an increasingly important part of Bill.com's strategy, with chairman, CEO and Founder Rene Lacerte pointing to the company's mobile app as a growing source of platform engagement for the company, and September seeing a year-on-year doubling of Bill.com mobile app downloads.
Speed and convenience are certainly traits of mobile platforms that contribute to growing adoption among businesses, and Bill.com expects its mobile app to continue to gain traction as it prepares to link its Instant Transfer capabilities, currently in pilot mode, to the app. The functionality is part of the firm's integration with The Clearing House, allowing for real-time payments that Lacerte noted is a growing demand among customers.
Boosting The Banking Experience
Corporate payment technology firms this quarter also enhanced their focus on banking solutions and collaborations.
"Key CashFlow became generally available for [KeyBank's] business banking customers in October and for the commercial banking customers this week," said Lacerte. "We are very pleased with how quickly we were able to stand up this partnership despite the unexpected challenges presented by COVID-19 from March through September."
According to Eberle, bank-FinTech collaboration has become an important factor for traditional financial institutions. Pointing to Bottomline's partnership with an unnamed "major regional bank," Eberle said, "They realized that if they waited, they were just falling behind their competition."
Bottomline is taking the time to enhance its banking products, he added, with a focus on commercial and corporate onboarding capabilities, as well as the development of a "cash flow optimizer," which aggregates data and analyzes to provide actionable insights.
The company, which also beat analyst expectations this quarter, said adoption of its Software-as-a-Service (SaaS) offering was actually faster than it was pre-pandemic, and despite B2B payment volumes lower than they were this time last year, direct and indirect sales had a strong showing. Bank collaborations are an important piece of that growth, according to Chief Financial Officer Rick Booth.