Viewpost, Visa Partner For V-Card Push Payments

Adoption of virtual cards in B2B payments is gradually increasing as companies take to the greater security and convenience of the tool. But as with any payment technology, gaining traction can be an uphill battle.

Today (March 28), B2B payments and invoicing platform Viewpost announced a partnership with Visa to allow businesses using the portal to pay suppliers with virtual cards. It’s not the first time Viewpost has revealed its confidence in v-cards, known as a safer, more efficient payment method in B2B payments by proponents of the technology. But, as Eliscu explained, Viewpost and Visa are approaching the initiative with some of the most challenging hurdles to virtual card adoption in mind.

Among the biggest hurdle is suppliers that don’t accept cards as payment. Research from Receivable Savvy released last year found that, while 63 percent of supplier said they would like to be paid electronically, just 9 percent said they prefer payment in commercial card. The reason? Cost.

According to Eliscu, though, times have changed.

“There is a perception of what costs there might be for suppliers, but that’s no longer the case,” he recently told PYMNTS. “People have been trained over and over again that virtual card transactions are very, very expensive, from a card-not-present perspective.”

Part of the problem, Eliscu explained, is that virtual cards often land at a supplier in the form of a pull payment, with those vendors receiving a virtual card number and having to manually enter in that information. The process leads to the highest interchange rate hitting a supplier. For low-margin companies, he said, it’s a major factor behind why some suppliers won’t accept cards whatsoever.

With its collaboration with Visa, Viewpost is turning a virtual card payment into a buyer-initiated transaction with straight-through processing, which can lower the risk of fraud and means a lower interchange fee. The partnership will also see streamlined onboarding for suppliers, a process Eliscu said can often take several weeks.

While these features of the partnership with Visa certainly focus on helping suppliers accept virtual cards, Eliscu highlighted how it will also be a significant opportunities for financial institutions – something Viewpost said it will be focusing on more in the future.

“Our focus has been on the elimination of paper check volume, on building partnerships with major financial institutions, on invoice and payment capabilities, and adding global companies to the platform,” he said. “We’ve now done all of those things, and we’re now focused on the next thing, which is to deliver value to bank partners.”

Eliscu said that, while virtual card opportunities are vast for larger corporates, banks struggle to onboard SMEs to the technology because the time and cost of providing a smaller business with solution outweighs the benefits for the bank.

“When you think about virtual cards or ePayables, it really is a product saturated in the mid and large corporate institutional banking customer base,” the CEO said. “But there is zero penetration with mid-market or lower mid-market and small business customers.”

That’s despite the fact that these smaller companies can account for trillions of dollars’ worth of B2B payments, often transacted via paper check. By focusing on its partnerships with banks, Viewpost’s deal with Visa also means its FI partners can provide virtual card solutions to SME clients with lower friction of onboarding time and cost. These banks will be the issuer of the virtual cards, Eliscu explained, which exposes them to that multitrillion-dollar market.

Facilitating banks’ ability to provide virtual cards to smaller business clients is one of the larger roadblocks hampering v-card penetration. But there will, of course, be continuing efforts from the B2B payments community to continue promoting the virtual card, especially among those suppliers that assume the cost is too high. Eliscu pointed to the rich remittance data that travels with a v-card transaction, along with the tokenization of a card number, that makes virtual cards as useful to a supplier as it is to a buyer.

“Virtual cards are something of great value to all constituencies,” the executive said. “It’s a win-win. We recognize that this product is so profitable for financial institutions and beneficial to their corporate customers. But it’s really never been available to the little guys.”

The trick for Viewpost, he added, will be pushing for supplier acceptance, and its continuing drive to reduce paper checks.

“It’s figuring out which of our customers are card acceptors, enrolling them and enabling them to convert these paper checks, where you’re literally printing out bank account information at the bottom of your check and sharing with all of your vendors, to these secure transactions where you have none of that same risk,” he added.