Speed Finds Opportunity In B2B Payments Beyond Accounts Payable

Corporate treasurers show increasing interest in real time and faster payment solutions, the latest research suggests. However, it’s not necessarily the ability to pay suppliers in real-time that has companies enticed.

Instead, taking a look at the latest solutions to emerge on the market shows various applications for speed in commercial transactions, from faster deposits for small businesses, to virtual cards enabling faster invoice payments for suppliers. Below, PYMNTS examines the latest financial products and solutions for corporates and small businesses with a focus on speed.

Chase Accelerates SMB Bank Deposits

JPMorgan Chase announced a collaboration with WePay last week to enable faster deposits for small business joint customers. SMBs using the WePay platform can now see funds deposited into their Chase bank accounts the same day without extra fees, a feature resulting from JPMorgan’s acquisition of WePay in late-2017.

“Because we are a bank [as well as a payments processor], we can deposit their credit card proceeds the same day, including weekends, at no additional cost,” explained WePay CEO Bill Clerico in an interview at the time.

Community Banks Go Real Time

State-chartered financial institution Bankers’ Bank, which focused on providing correspondent banking solutions to community banks, recently announced it would become a funding agent for institutions that want to offer real-time payments via The Clearing House’s RTP service. Operating as a funding agent will broaden community banking participation in RTP, Bankers’ Bank said, adding that it will also build a 24/7 liquidity management solution for RTP transactions within its cash management suite of services.

Bankers’ Bank said it would be collaborating with IT and business consulting services provider CGI to support its process in becoming a funding agent.

With community banks playing a prominent role in small business lending and financial services, it’s not a stretch to assume community bank partners of Bankers’ Bank could grow value to their small business clients by offering access to RTP transactions.

Treasurers See Faster Payments Benefits

The Association for Financial Professionals’ newest report, its 2019 EFP Electronic Payments Survey, underwritten by JPMorgan, found that a majority of corporate treasurers surveyed expect to see benefits from faster and real-time payments, with 60 percent acknowledging faster payments opportunities.

The AFP’s report found new lows in corporates’ use of checks for B2B payments, with more than one-third saying they aim to remain current with new payments technologies. However, the AFP’s survey did not uncover specific opportunities corporate treasurers expect from adopting faster payment solutions — with researchers also warning that check use remains prominent and that while treasures may be interested in payments innovations like real-time payments, it doesn’t necessarily mean they’ll adopt them.

“Although new technology is appealing, treasury and finance professionals tend to stick with what works for them, and their vendors,” said AFP President and CEO Jim Kaitz.

FinTechs Move Money To Vendors Faster

While faster payment rails and infrastructure are one way to accelerate B2B payments, some FinTechs and solution providers are exploring how financing options can get money to suppliers more quickly — without businesses having to give up their cash right away.

This is the business case for commercial card products, which enable companies to pay their invoices with cards and repay their card bills over time. The latest example of this model comes from Yardi, which announced last week the rollout of Yardi Bill Pay.

The solution connects property managers with a payment solution to pay their vendors and will integrate Mastercard virtual cards as a payment option. According to the companies, speed is a crucial benefit of such a tool.

“The Yardi Bill Pay solution, powered by Mastercard’s virtual cards, benefits suppliers by providing faster payments and reconciliation tools to ensure a seamless experience for all parties,” said Mastercard Senior Vice President, Business Development, U.S., Marie Aloisi in a statement. Yardi Procure to Pay and Energy Vice President Akshai Rao pointed to the ability for suppliers to shorten days sales outstanding with such a tool.

Only days later, in Australia, 3Pay launched operations as an invoice financing solution with a specific focus on ensuring that vendors get paid more quickly — again, without forcing corporate buyers to give up cash right away. It offers businesses a three-month repayment plan when 3Pay fronts the bill to pay for outstanding invoices.