In consumer payments, enabling the acceptance of electronic payments often makes the process easier.
When it comes to corporate payments to suppliers, however, digitizing the payment is only part of the solution.
According to the 2016 AFP (Association for Financial Professionals) Electronic Payments Survey, just over half of B2B payments continue to be made by check.
There’s a reason for that, Boost Payment Solutions CEO Dean Leavitt told PaymentFacilitator.com: commercial payment systems are complicated.
“There are typically contractual relationships, payment terms, and invoices that need to be reviewed and approved,” Leavitt said. “It’s a complicated relationship between trading partners, and that creates a lot of complications in terms of digitizing it.”
Then, there’s the fact that the credit card infrastructure was built to accept consumer payments.
“When credit cards were invented, they didn’t really envision these rails or this infrastructure being used for business-to-business payments,” Leavitt said. “And they certainly didn’t envision it being used for multimillion-dollar transactions. So, we have to make process changes to accommodate the business environment.”
In the corporate world, virtual cards are one solution being used in place of checks. The term refers to the use of credit card numbers sent electronically, rather than plastic cards.
This solution comes with its own complexity, Leavitt said. Banks have differing systems for issuing the virtual card numbers. Some will send them embedded in an email while others will send them in attachments. Still other systems require logging in to a portal to retrieve the number, which may in some cases be only eight digits that need to be matched to other numbers in the supplier’s system.
“The card state of the art in the absence of systems like ours is very cumbersome for suppliers that have any velocity of payments to deal with these virtual cards,” Leavitt said.
Boost has built a platform, called Boost Intercept, that accepts the virtual card payments and processes them on behalf of its suppliers. It eliminates the need for its clients to support the varying platforms. It also keeps them from having to manage the card data, which means they do not have to be concerned with PCI compliance.
Other companies offer similar services. Billtrust, for example, recently announced its own virtual card capture system to capture and process payments for its supplier clients.
Boost is a registered payment facilitator. Accessing the PF model is a good fit for the company, Leavitt said, because it offers increased flexibility and efficiency.
“We use it so we can be more creative with our suppliers in terms of what their funding needs are. And in terms of expediting approval and boarding processes, it is a much more efficient way for us to get suppliers up and boarded on the system,” he said.
Leavitt said that he sees B2B payments as an area that is ripe for innovation – but that innovation must be focused on the specific needs of the business. He started his company after seeing others try to apply the lessons of consumer payments to the space, without success.
“At the heart of what Boost does, we are the moth to the bulb of pain points,” he said. “We don’t live in a ‘let’s build it because it’s cool’ or ‘let’s build it and hope they come’ environment. We try to understand what specific pain points there are in the marketplace deeply and thoroughly, and then create products and solutions and procedures that eliminate those pain points.”