Payments Innovation

Mastercard On Tackling AP Automation’s Last Mile

If the last mile of eCommerce lies with logistics — getting goods where they need to go — the “last mile” in digitizing payments processes may lie within payments automation.

Managing cash flow, after all, is a balancing act between cash in (being paid) and cash out (making payments). It’s a process mired in paper checks and invoices, and thus mired in inefficiency.

But change may be on the horizon.

As found in the B2B Payments Automation Innovation Playbook, a joint effort between PYMNTS and Mastercard, the data across 400 decision-makers spanning 12 industries shows an increasing awareness of, and desire to, implement new technologies to streamline payables.

This can be seen in the fact that 25 percent of respondents have implemented at least some form of AP automation, and another 16 percent have begun that process. As noted in the data, too, most of the companies surveyed that have not yet implemented their AP systems say they will begin the process within about three years.

Glass Half-Full

In a Masterclass interview with Karen Webster, Andrea Gilman, senior vice president of product management for new payment flows at Mastercard, said that from a high-level view, when talking about payables automation, “we are talking about making it really easy for corporates to be able to pay their bills” in a way that removes paper and manual processes from the system.

She said the fact that 59 percent of firms have yet to tackle payments automation represents a “glass half-full” opportunity, both for the firms that both provide ePayables solutions and for the executives who wish to see improvements to operations.

By adopting automation, the accounts payable department can free up time for any number of strategic endeavors and gain real insight into what is actually going on within a business.

Clearing the Hurdle

Drilling down a bit, Gilman told Webster that much of the opportunity within that aforementioned 59 percent lies with middle-market firms, whose top lines can span $100 million to as much as $1 billion.

“We have seen that the largest corporates have figured out ways to automate a lot of their processes” and digitize payments, said Gilman.

It will indeed take time to replace the paper checks that make up 51 percent of corporate payments. But, as Gilman noted, the desire is there “across the board” from suppliers and buyers to move beyond paper.

“The folks who have their eye on the ball are going to start taking up a lot of these payment solutions,” she said of AP automation — and the eventual demise of inefficient, paper-based processes.



About: Accelerating The Real-Time Payments Demand Curve:What Banks Need To Know About What Consumers Want And Need, PYMNTS  examines consumers’ understanding of real-time payments and the methods they use for different types of payments. The report explores consumers’ interest in real-time payments and their willingness to switch to financial institutions that offer such capabilities.