Dealing with all the places your credit card number has gone to pay for various subscriptions can become a bit unwieldy even for the average consumer.
Multiply that effect by the number of a company’s employees – for whom software and tools are increasingly cloud- and subscription-based – and you can begin to see how demanding the recurring billing model has become for many companies.
Portland-based Paylasso is looking to help finance professionals manage in this new environment. Having spent much of his career in corporate finance, Paylasso co-founder and CEO K.J. Gundersen has watched the procurement process evolve from buying one-time software licenses to as many as 50 to 100 vendors having the company’s cards on file.
“It has this brutal knock-on effect for the finance team, in that they have to go and put Humpty Dumpty back together again after everything is all fragmented. Each month they have to do the receipt collection, scour the credit cards, tag all the transactions,” said Tony Tom, co-founder and COO.
Using the Paylasso platform, employees request the service they need. The system sends the request to an approving manager, then once the request is approved, the platform issues a unique virtual card number for that service.
Paylasso says that the single-purpose card numbers help solve for a number of potential issues associated with recurring expenses.
The platform can report on one employee’s subscriptions, for example, so if that employee leaves the company, their seats can be transferred to someone else or cancelled. Employees also have a single place where they can verify that the subscriptions they have are still needed, and cancel them if not.
The virtual card numbers also have the potential to help prevent fraud, the company says. Because they are single-purpose card numbers, the company’s finance team is able to identify transactions that fall outside the scope of the approved use, indicating a possible compromise.
The system also helps manage redundancy across teams, allowing teams to search across the organization to determine whether another team has already procured a service that they need.
Paylasso launched its product to the market in August. The platform is currently a standalone system that exports data to be imported into a company’s accounting software. The company is working on integrations with commonly used accounting software packages.
“As opposed to having to scour through their corporate credit card statement each month and go through a tagging exercise, which is sort of standard for most accounting teams, all of that data comes out of our system pre-tagged so they can easily import it into their existing accounting system,” Tom said.
To issue the virtual cards, Paylasso has partnered with a bank in Portland, Maine, and is talking with other financial institutions.
“We’re deploying a payment system in addition to an expense management solution,” Tom said. “We’re really a bit of a hybrid between those two things. It’s an expense management solution for businesses built on the backbone of a virtual card issuing network.”
“Essentially, we are a licensed distributor of Mastercards to our clients and customers, who are then putting those cards on file,” he continued.
The founders’ long-term vision for the company goes beyond company subscriptions to a holistic payment system that helps finance teams manage all kinds of incidental, card-not-present expenses, such as travel booking.
“We’re democratizing the corporate credit card. Because if you think about it, corporate credit cards are typically deployed to a few managers and executives within the company, but not everybody. And it takes one to two weeks each time you need to get a new card. But we can generate specific purpose corporate credit cards for any employee instantly,” Gundersen said.