Augmenting Payment Rails To Drive Value For Business Users

As businesses large and small expand their payments technology adoption, financial service providers are seeking to augment an array of existing and new payment rails to drive corporate use.

The rise of faster and real-time payments infrastructure will have profound impacts on the ways corporate treasurers manage money and transaction data, for instance, while in the area of smaller businesses, mobile transactions making use of card and bank transfer rails have also captured the attention of FinTechs and finserv providers.

Below, PYMNTS breaks down the latest in payment rail innovations looking to enhance the business payments experience.

Corporates Weigh Their Real-Time Stakes

Though faster and real-time payments are often discussed in the context of the impact on consumers, corporate treasures have high stakes, too, as the U.S. makes progress in its real-time payments rollouts.

In a recent interview with PYMNTS, the Accredited Standards Committee X9 discussed why it has expanded the scope of its Corporate Banking Committee to include faster and real-time payments. As the Committee’s Executive Director Steve Stevens, and its Vice-Chair and President of University Bank Stephen Lange Ranzini, explained, the development of the nation’s faster payments landscape will have profound impacts on the ways chief financial officers and treasurers manage payments and finances.

It’s key that as the Federal Reserve moves forward with the rollout of FedNow, The Clearing House progresses with RTP, and other industry participants introduce their own real-time payments solutions, that these networks can interoperate with each other, they said. For corporates, the ability to access transaction data and integrate it between systems and workflows will be essential, while mitigating security risks will also be critical. Treasurers must have a seat at the table as industry stakeholders progress with the launch of real-time payment rails, said Stevens and Ranzini.

FinTechs Lower Barriers To Card Rails

With more corporates embracing the commercial card to make payments to suppliers, arm employees with company cash and manage expenses, solution providers are adding new value to card rails that can enhance the business payments experience., for instance, recently announced new funding in support of its single-use virtual card generation solution. With the new investment going towards expanding into the B2B payments space, the company’s CEO Bo Jiang told PYMNTS in a recent discussion that is developing an application programming interface (API) that will allow developers and corporates to integrate its virtual card generation technology directly into their own solutions.

It’s a strategy, he said, that can not only provide corporates the value of the virtual card, but also enhance its functionality by enabling back-office systems to more efficiently access transaction data from the virtual cards generated.

In a separate discussion with PYMNTS, Comdata Senior Vice President of Operations Meitra Aycock said organizations have an opportunity to monetize their virtual card programs as they embrace the payment rail. That means generating a new revenue stream through rebates and cutting costs through early payment discounts, she explained.

Mobile Payments Eye Commercial Opportunity

Card rails’ compatibility with digital wallets and mobile payments is another growing opportunity for financial service providers in the B2B payments arena.

J.P. Morgan recently announced a partnership with Marqeta that will facilitate the use of virtual cards for corporate users within mobile wallets like Apple Pay or Samsung Pay, an initiative the companies said can help businesses streamline their payments workflows.

But card rails aren’t the only technology embracing mobile payments for businesses.

Zelle, operated by Early Warning Services, recently announced that as the pandemic and social distancing mandates drive up the use of its mobile bank transfer solution, small businesses are also embracing the infrastructure.

It’s the value-add of integrated and automated data capture from transactions that can aid small businesses in financial management, the company noted, adding that more small businesses are also using the tool to issue payroll or make B2B payments to other small businesses using Zelle.