Cards, Trade Credit Bridge Buyer-Supplier Gap


Technologies and payment solutions are finding the opportunity to multitask with solutions that, while initially focused on the corporate buyer, have now expanded to tackle friction for the supplier as well. This week’s look at the convergence of accounts payable and accounts receivable finds tools like commercial cards, trade credit, artificial intelligence and robotics process automation easing friction on both ends of a B2B transactions.

PYMNTS And CSI Eye AR-AP’s Digital Shift

In their December 2020 Digital Shift Report, PYMNTS and CSI examine the digitization acceleration of accounts payable and accounts receivable departments as organizations adjust practices to a remote working environment. According to a survey, more than 74 percent of financial executives in the U.S. said they are focusing their automation investments on AR and AP. Artificial intelligence (AI) is an increasingly popular investment, the report found, with technologies able to accelerate workflows that benefit both buyer and supplier.

For instance, AI-powered processing tools can allow an accounts payable department to process vendor invoices more quickly and accurately, enabling faster payment. Technologies that sit between AR and AP departments can also elevate financial visibility to allow finance teams to make better liquidity management decisions, the report found. In a recent interview with PYMNTS, CSI President David Disque noted that CSI’s straight-through processing capabilities allow AP departments to pay vendors via virtual cards without any manual intervention on suppliers’ AR side to actually accept that transaction. This “improves the supplier’s days outstanding and greatly reduces back-office operations, bringing significant efficiencies for both buyers and suppliers,” he said.

Robotics Process Automation Tackles AR-AP Friction

In a recent Deep Dive, PYMNTS examined the opportunity in Robotics Process Automation (RPA) to address key points of friction in accounts payable departments. As it turns out, the technology can also ease friction for suppliers’ AR operations, too. Currently, even digitized AP departments must wait on physical or PDF invoices to be submitted from their vendors, with information on those bills needing manual intervention to capture data and process the invoice for payment. In the context of the pandemic, remote working has slowed down this process even further, creating pains for suppliers as they face delayed payments and cash flow constraints. RPA and other intelligent tools like optical character recognition (OCA) are able to automatically capture data on paper or PDF invoices, extract that information, and input it into back-end systems — not only easing friction for AP departments’ invoice processing, but accelerating payments for suppliers’ AR operations, too.

Boost Gives Suppliers A Voice In Card Acceptance

Commercial cards are valuable payment tools to corporate buyers and their accounts payable departments. But the products have often failed to include corporate users’ own suppliers in the conversation about acceptance, creating an ecosystem in which many vendors decide not to accept cards or the interchange fees with which they come. “Suppliers have had card acceptance thrust upon them with a very rigid set of rules,” said Dean M. Leavitt, founder and CEO of Boost Payment Solutions, in a recent conversation with Karen Webster. Boost aims to reframe that conversation with the supplier having a greater say in commercial card usage, and expanding awareness about the benefits commercial cards not only offer to AP departments, but to suppliers’ AR departments, too.

CardUp Eases Card Adoption In Asia

CardUp, based in Singapore, is expanding to Hong Kong with technology that enables businesses to adopt commercial cards and make payments even when their vendors don’t accept cards in their own accounts receivable departments. In a recent interview with PYMNTS, CardUp CEO Nicki Ramsay said the commercial card is “similar to having a loan in your pocket,” allowing businesses to use untapped credit lines. In a market where cash and checks remain the dominant B2B payment methods, CardUp provides flexible to accounts payable departments to pay for expenses, like rent, when cards aren’t typically accepted. Suppliers, meanwhile, can receive payment via bank transfer. Easing AP and AR friction simultaneously can also support the drive to digitize B2B payments in the region. “Businesses still spend almost 2,000 hours each year making and processing payments,” said Ramsay, noting that B2B payment technology that sits between the buyer and supplier can tackle friction for both sides of the equation.

Legal Cannabis Steps Into The World Of Trade Credit

Offering sales to corporate customers on trade credit is an important component of B2B trade. But in the legal cannabis space, a lack of digital payments adoption and bank participation has left marijuana vendors unable to offer trade credit to their retail customers. Speaking with PYMNTS about this point of friction, LeafLink Financial Executive Vice President and Head Doug Gordon said the B2B payment challenges of the legal cannabis space are no different to those of other industries, only they’re “on steroids.” LeafLink Financial has stepped in to facilitate trade credit to the industry, addressing key pain points like the challenge of lenders to underwrite businesses in the sector, most of which are new without robust financial histories. In doing so, corporate buyers can have the payment terms they need when procuring product, while suppliers can get paid via ACH upon delivery without taking on trade credit risk.

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NEW PYMNTS STUDY: HOW LOCATION DATA CAN HELP BANKS PREVENT ONLINE FRAUD 

The November 2020 study How Location Data Can Help Banks Prevent Online Fraud, PYMNTS surveyed a balanced panel of 2,141 U.S. consumers who own mobile devices and use credit or debit cards at least monthly. The study examined their willingness to share mobile location data with FIs to keep their accounts safe as well as their interest in switching to banks that leverage geolocation tools to prevent fraud.





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