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initiated. These "pull payments" require suppliers to email But most B2B card solutions today stop short of being truly
information to buyers where staffers key in data for each straight-through, Murphy said. "If [the industry] wants the
transaction. This can be particularly labor intensive for card share of the B2B market to increase, they are going to
large companies, such as giant telecommunications firms have to figure out a good STP scheme," he insisted. "That's
with thousands of buyers, many with unique technology where all the real growth will come in the next five years."
and process protocols, Leavitt added.
While businesses should be drawn to the potential
The pull-payments approach also puts companies at operating efficiencies and cost savings B2B card payments
risk of noncompliance with Payment Card Industry offer, there also are cash flow and working capital
(PCI) requirements for securing card data, added Sayid considerations. Accepting card payments allows suppliers
Shabeer, Chief Product Officer at HighRadius Corp., to reduce DSOs, as many business customers are willing
which specializes in integrated receivables solutions. to pay earlier when using cards. "As corporate treasurers
HighRadius works with Noventis to support STP for prioritize working capital management during challenging
virtual card payments. economic times, commercial cards can defer payments
while offering early payment to suppliers," Patricia Hines,
Both Murphy and Leavitt feel buyer-initiated (push a senior analyst in Celent's banking practice, wrote in a
payment) virtual card schemes better address B2B report last year.
requirements. "Push payments is where the opportunities
really lie" for virtual cards, said Murphy. Additionally, many suppliers offer early-pay discounts of
up to 2 percent for traditional (check and ACH) payments.
Leavitt said the Boost Intercept platform was built to Those discounts can be eliminated when offering card
respond to this "massive pain point" for large companies. payment options, Leavitt noted. That, in turn, can drive
He likens the platform to a "virtual card lockbox" that down the effective cost of card acceptance.
translates email or file-based payment notifications into
STP payments and simultaneously transmits remittance Another benefit to businesses of B2B card payments is the
details to the requisite accounting systems. Boost potential to generate new revenue streams and cost offsets
partnered with Mastercard; this year, the two firms began in the form of card issuer rebates. These rebates (which
working together in the Caribbean to support that region's like consumer credit card rebates are calculated as basis
nascent commercial card market. points on each dollar spent) can amount to tidy sums for
companies that rack up millions of dollars a year in B2B
In 2017, Mastercard unveiled the Mastercard B2B Hub a card payments. "The combination of getting rebates and
push-payments approach to automating accounts payable the working capital improvements is a very powerful one-
processes at small and midsize firms, offered through two punch," Leavitt said.
card-issuing banks. Mastercard's technology partner
in the project is AvidXchange, a company specializing Card payments also provide businesses with better fraud
in invoice and automation for virtual card and ACH protections. "Compared to traditional payments, cards
payments. AvidXchange claims integrations with more offer extensive fraud controls that traditional payment
than 130 accounting and other back office systems across methods lack," Hines wrote. "The card networks and banks
5,500 customers in North America. are continually improving fraud and security [controls]."

Micahel Praeger, co-founder and CEO of AvidXchange, The potential motivations for using cards for B2B payments
estimated there are over 350,000 underserved businesses is not limited by company size. The potential benefits are
in the company's target market. Mastercard holds a achievable across the board – from the largest companies
minority stake in the company. Fifth Third Bank, which down to smaller firms.
also holds a minority interest in AvidXchange, was the
first card-issuing bank to join Mastercard's B2B Hub. A Mercator survey of 1,600 small businesses in 2017, for
example, found eight in 10 have credit or charge cards.
STP, other promising benefits for SMBs The survey also revealed that small businesses are less
"The conversion of paper to automated information opens likely to pay off credit card balances each month than are
the door to STP, which has eluded many small businesses," consumers. "Managing cash flow is a top concern for small
said Jeffery. STP eliminates time-consuming manual entry businesses," said Karen Augustine, Manager of Primary
of payment and related information, thereby streamlining Data Services at Mercator.
receivables processing, Jeffery explained. "These benefits
enable merchants to extend their acceptance of card Patti Murphy is Senior Editor of The Green Sheet. Follow her on Twitter
payments beyond the sale of goods and services, and into at @GS_PayMaven or email her at patti@greensheet.com.
the arena of accounts receivables," he added.

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