B2B PAYMENTS in 2015 – IT’S TIME TO MOVE FORWARD
EXECUTIVE INSIGHTS SERIES

“Suppliers that accept virtual commercial card payments are currently burdened by a) the operational inefficiencies caused by the manual nature of the current process, b) the security implications of accessing, storing and passing sensitive card data and, in many cases, c) an unnecessarily high cost of acceptance. Solutions and programs that directly address these pain points will help facilitate the expansion of commercial card acceptance among larger and more sophisticated suppliers.

Regarding the transaction process, suppliers currently receiving virtual card notifications from customers (or the customer’s issuing bank) must manually logon to a portal, extract sensitive card data, process the transaction through its acquiring hard/software system and then properly dispose of such card data in order to be in compliance with PCI DSS standards. Suppliers should, instead, be required to do absolutely nothing but receive notifications that transactions have been processed on their behalf, while at the same time avoid any exposure to card data, which will exempt them from PCI DSS compliance and its related costs.

Regarding data, solution providers will need to provide suppliers with detailed remittance data in a broad range formats that can be easily “ingested” by their ERP/accounting system, thereby making reconciliation easier and quicker. As both sides of the transaction move to more sophisticated and less expensive ERP systems, their reliance on data and the ability automatically reconcile transactions has become mission critical and I see that trend accelerating dramatically in 2015. This functionality is not currently available to suppliers through most acquirers/processors, but this will need to change quickly, as it provides the supplier with a new-found capability to utilize the rich data they may have previously received in unmanageable formats to enhance operational efficiencies. This is especially important for high velocity suppliers that regularly receive consolidated card payments housing hundreds or even thousands of individual invoices.

Lastly, regarding new pricing constructs, while the issuing and corporate cardholder communities have historically been resistant to introduce lower interchange rate programs due to their perceived fear of cannibalizing revenues from existing programs, they have both recently begun to understand that offering suppliers a lower cost of acceptance, coupled with easy reconciliation tools, actually allows them to expand card programs to those suppliers that would have otherwise never considered card acceptance as a form of payment without such added benefits.”