Many accounts payable (AP) professionals turning to electronic payments to streamline their companies’ payment processes — specifically, how they pay invoices from suppliers — are putting virtual cards at the top of their lists, and for good reason.
Virtual cards allow AP departments better control over expenses and cash flow, improve operational efficiencies and guard against card fraud. Furthermore, this solution forges deeper ties with suppliers, as payments are speedy and safe.
Yet, while the use of virtual cards is spreading across different sectors in the B2B space, the solution is also running into speed bumps. Mainly, AP professionals and vendors are tied to legacy systems built around paper-based payments, and both sides hesitate to implement virtual card solutions, fearing disruption to current enterprise resource planning (ERP) systems.
In the Next-Gen AP Automation Tracker, PYMNTS examines how banks can educate firms and vendors on the benefits of virtual cards, and weave the input of all the stakeholders into the implementation.
Across The Next-Gen AP Automation Space
Advanced learning tools such as artificial intelligence (AI) are increasingly making an impact on businesses’ AP processes, according to a recent survey conducted by payments automation technology provider Bottomline Technologies. The company surveyed 160 financial and treasury professionals on payments and banking innovations and found that 65 percent of respondents believe that the shift to AI is already here and that greater efficiency, automation of manual processes and reduced payments fraud are its top benefits.
Many businesses are turning to virtual cards as they seek to generate revenue from rebates and discounts. Northwood Hospitality is one such player that is seeking to do that by implementing BirchStreet Systems’ full suite of AP payment solutions. The company expects a “seven-figure bottom-line impact” from the implementation. Among other things, Northwood said BirchStreet’s new module BirchStreet Pay allows operators to pay by check, automated clearing house (ACH) and virtual card.
Small and medium-sized businesses (SMBs) are especially lured by automated solutions. SMBs are heavy users of corporate cards, and they stand to benefit from the ability to better manage cash flow, as well as generate additional revenue from rebates. SMBs value financial flexibility, and ScaleFactor recently unveiled a Visa card to give its SMB clients just that. The Texas-based business solutions provider said its clients can issue employees physical, digital or temporary cards with flexible spending limits per card. The cards can also be fully integrated into ScaleFactor’s accounting and finance platform.
U.S. Bank Uses Customer-Centric Strategy To Smooth Virtual Card Integration
Despite the many benefits offered by virtual cards, AP professionals and vendors still have reservations about adopting them. Card issuer U.S. Bank believes it has the perfect weapon to counter such reluctance: strong client and vendor input.
In this month’s feature story, U.S. Bank’s Adam Kruis, senior vice president and manager of working capital consulting, and Jennifer Swenson, vice president of corporate payment systems, explained how the bank uses a strong customer-centric strategy that weaves insights from all stakeholders to ensure smooth implementation of its virtual card solutions.
Deep Dive: AP Professionals Turn To Virtual Cards For B2B Payments
Despite the still-dominant use of paper checks to compensate suppliers, AP professionals are motivated to turn to automated solutions for speedier and safer payment options. A recent report by PYMNTS found that 46.4 percent of accounts payable professionals would like to implement electronic invoice solutions, and 22.9 percent would like to integrate ePayables with virtual cards into their B2B operations.
While highlighting the benefits that virtual cards offer in streamlining AP payment processes and controlling cash flow, this month’s Deep Dive also examines the challenges to speedy adoption of the virtual solution across the B2B payments environment.
About The Tracker
The Next-Gen AP Automation Tracker, a PYMNTS and Bottomline Technologies collaboration, is a monthly report that highlights the most recent accounts payable developments and automated solutions disrupting how businesses process invoices, track spending and earn rebates on transactions.