This posting is found in Finextra and discusses a new expanded partnership between Capital One and Melio, the payments automation fintech based in New York City. Many readers will know that one of the major issues emanating from the pandemic is the disproportional negative impact on small businesses of the lockdown policies. This is a continuing problem in terms of managing adequate cash flow given the workforce and supply chain issues. As such, this particular partnership provides additional tools for small businesses to pay and get paid in a more efficient manner.
‘This strategic partnership will enable Capital One small business cardholders to pay their vendors and suppliers with a card – even if they do not accept credit cards – directly from their Capital One Business account…
Small businesses across the country continue to use time-consuming and costly methods to pay their vendors, with many still manually writing and mailing checks. Melio’s payments technology for small businesses enables credit cards to be accepted everywhere, saving businesses valuable time and money that would otherwise be spent mailing checks or managing wire transfers.’
One of the best ways to improve working capital effectiveness is to digitize financial operations, either in certain disciplines or across the organization. Small businesses have been generally mired in manual processes and they can benefit greatly by utilizing better tools for payables and receivables. In this case, one of those flexible tools is to use their small business card as a credit source to make a payment to a supplier, even if the supplier does not accept cards. This flipping of payment tools happens in the background and satisfies the needs of both parties. The buyer gets the additional working capital via better DPD and the supplier does not need to adjust their back office, at least for now.
‘“At Capital One, we recognize the power that adoption of payments technology can generate for businesses. In fact, a recent Capital One survey found that more than a third of small and mid-sized business leaders cite investing in automated, real-time, or fully integrated payables as a top priority over the next year,” said Rebecca Silver, vice president, small business card at Capital One. “Through our partnership with the innovative team at Melio, we are proud to deliver this capability to our customers and continue to help transform how they do business.”
Overview by Steve Murphy, Director, Commercial and Enterprise Payments Advisory Service at Mercator Advisory Group
