Pandemic Spurs Modernization and Competition within B2B Payments
This referenced posting in bobsguide is another example of a theme common to many of our discussions since the onset of the pandemic. That is, folks are expecting COVID-19 to be a catalyst for accelerated digitization of B2B payments, among other things. Readers can refer to a pandemic tracking page for a potpourri of articles on the ongoing crisis. In this piece, the author summarizes a discussion with an exec at a fintech specializing in B2B modernization through virtual cards.
‘“We’ve seen a huge amount of interest in innovation in general at this stage,” says Paul Raymond, director of strategic relationships, Conferma Pay. The fintech announced a partnership with Visa to provide virtual corporate card payments earlier in May…According to Raymond, the challenges brought on by the pandemic are causing corporates to re-evaluate their payment processes.’
The indicated deal highlights an expected transition to virtual mobile transactions and away from plastics in the corporate traveler use case, something we have been waiting on for several years. General lack of demand has been the case in North America, although some other markets have embraced the mobile experience (mostly through tap and go). But the ‘no touch’ pandemic environment is now expected to finally help push that envelope out much faster. Another network move referred to in the piece is Mastercard Track, which we also summarized in these pages recently. That use case is more along the broader lines of overall payables for goods and services, easing the payments interaction between buyers and suppliers.
‘The solution will automate the exchange of payment data between buyers and suppliers via platforms such as Velo Payments. According to Drew Weinstein, chief executive of Velo Payments, the current market highlights the importance of managing payments efficiently…“Cost and flexibility are key in this new market. Businesses are looking for solutions that can keep up with the increased pace of change and the new forms of payment from wallet to card and account,” said Weinstein in an email, adding that legacy institutions are costly and clunky…“We’re going to see a massive wave of change in the industry as a result of coronavirus.” ‘
So the short/medium term pain is going to continue, especially in the travel and entertainment verticals, but emerging from the crisis we should be seeing the B2B digital transition finally unfold.
Overview provided by Steve Murphy, Director, Commercial and Enterprise Payments Advisory Service at Mercator Advisory Group.
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