How Two New Collaborations Could Speed up the Move Toward Digital B2B Payments

Payments between businesses have long remained ensnarled in paper processes that consumer payments have largely left behind, but lately signs have emerged that technology is at work streamlining business-to-business transactions. On Monday, fleet-fueling and corporate-payments specialist WEX Inc. said it will work with American Express Co. to allow clients to make payments via virtual cards with both one-time and multiple-time use capability.

At the same time, Visa Inc. announced it is teaming with billing-services provider Billtrust to develop a network that can enable electronic payments to corporate suppliers.

The scope of the market is huge. A 2015 estimate cited by Visa in its announcement Monday indicates U.S. B2B payments total $24 trillion annually. Some 51% of those transactions are still initiated with paper checks, according to a separate estimate from a 2016 study by the Association for Financial Professionals, also cited by Visa.

The resort to paper stems largely from an inability to match buyers’ payment preferences with suppliers’ acceptance capabilities, experts say. “Today, suppliers have to balance their own payment preferences with the preferences of their customers’ accounts-payable departments, and those two preferences don’t always sync up,” said Flint Lane, chief executive at Lawrenceville, N.J.-based Billtrust, in a statement.

Billtrust will work with Visa to develop the 18-year-old company’s Business Payments Network, a system that aims at converting payments to electronic processing through a registry of suppliers that accept such transactions. The new platform will also bring financial and payment information together in one data stream, “while delivering streamlined reconciliation to suppliers and buyers,” the parties say.

This is not the first time the two companies have collaborated. Last year, they said they would integrate Billtrust’s virtual card capture software with Visa’s straight-through processing system for B2B payments.

That echoes a tack AmEx is taking with South Portland, Maine-based WEX. The two companies announced they would use WEX’s accounts-payable technology, Synaptic, to allow businesses using AmEx business and corporate cards to pay suppliers with virtual versions of the plastic. Integrating the virtual card capability with Synaptic will enhance efficiency but also allow users to earn rewards, the two parties say.

This partnership follows by less than two weeks WEX’s announcement that it will acquire bill-payment and virtual card specialist Noventis Inc. Terms of that deal were not announced. Last year, WEX paid $129.8 million to buy AOC Solutions, which had provided technology for its virtual card product.

Virtual cards are not a perfect solution for corporate payments, as they often involve manual processing at the receiving end. To ease that burden, Noventis in May said it would work with a cloud-based accounts-receivable company called HighRadius Corp.