B2B Payments

Payments Tech Takes Advantage Of Payment Rails Building Blocks

Despite some drawbacks, legacy rails have mounds of potential to tackle a multitude of B2B payments friction points.

For payments technology players, finding the opportunities to build upon existing infrastructure continues to open up new doors in B2B payments improvements.

This week’s look at the latest in payments rails innovation finds players including Mastercard, Aflex and Paycor targeting existing card and ACH rails to expand their use for corporates, with a focus on reconciliation, data capture and transparency. Meanwhile, credit unions (CUs) are growing more interested in embracing an entirely new rail for their clients and themselves: The Clearing House’s RTP.

Mastercard Track Business Payment Services Launch

In a significant step toward building upon existing rails to improve B2B payments, Mastercard recently announced that its Mastercard Track Business Payment offering is now live in the U.S.

Operating on the card and other rails, the service aims to provide greater control and transparency in the B2B payments ecosystem, targeting suppliers with streamlined and automated reconciliation capabilities without forcing clients to pay via card. Buyers, meanwhile, can capture early payment discounts, gain payment choice, and automate reconciliation, too.

“When we started work on Mastercard Track Business Payment Service, we looked at the persistent problems in B2B payments and asked ourselves how we could solve them for the benefit of buyers and suppliers,” said Mastercard Executive Vice President of Global Commercial Products James Anderson in a statement.

“What we’re building with our partners is a fully digitalized and extremely efficient way for businesses to pay and get paid using multiple payment rails so that buyers and suppliers each capture new and demonstrable value from their payments activity,” he continued.

Mastercard is planning to expand the service into new markets with new partners and into other account-to-account payment rails, the company said.

Adflex Eyes Card Rails For B2B

There is no such thing as a silver bullet in B2B payments, a single card rail that will address all friction points for all buyers, sellers and stakeholders. But according to payments processing company Adflex, the card rails hold a particularly large opportunity to mediate friction points, especially when it comes to adopting virtual cards and cloud technology.

In a recent interview with PYMNTS, Adflex CEO Pat Bermingham said while purchasing cards can be complex when it comes to integrating data and payment workflows in the back office, virtual cards support seamless data connectivity and back-end integration when combined with the adoption of cloud-based platforms like accounting and enterprise resource planning (ERP) solutions.

Paycor Certified By NACHA

Payroll and human capital management solution provider Paycor recently revealed that it secured NACHA Certification through its ACH processing. In an announcement on its website, Paycor said the certification means the company has demonstrated robust compliance and risk management capabilities, adherence to NACHA’s Operating Rules, and adequately addressed disaster recovery and business continuity needs of business clients.

“Becoming NACHA Certified provides Paycor the opportunity to demonstrate to our customers and banking partners that we perform at the highest standards of ACH processing, compliance and payroll security,” said Paycor Chief Financial Officer Adam Ante in a statement.

CUs Move Closer to RTP

In an embrace of one of the newest payment rails in the U.S., CUs are beginning to explore the value proposition of looping into The Clearing House‘s RTP network. Doing so can be challenging, however, particularly for smaller financial institutions (FIs) with limited resources.

Corporate One Federal Credit Union CEO Melissa Ashley recently discussed that challenge in an interview with PYMNTS, pointing to the opportunity for CUs to work with an industry service provider to tackle the logistical burden of connecting into the payment rail. Doing so, she said, not only means CUs can offer RTP services to their own customers, but they can actually wield the real-time payments capability for themselves when it comes to internal transactions like payroll.

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PYMNTS STUDY: THE CROSS-BORDER MERCHANT FRICTION INDEX – JUNE 2020

The PYMNTS Cross-Border Merchant Friction Index analyzes the key friction points experienced by consumers browsing, shopping and paying for purchases on international eCommerce sites. PYMNTS examined the checkout processes of 266 B2B and B2C eCommerce sites across 12 industries and operating from locations across Europe and the United States to provide a comprehensive overview of their checkout offerings.

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