This release in Yahoo! Finance provides another example of the ongoing pivot by card networks towards the B2B payments space. Payments automation has been underway for some time, although the transition has been surprisingly tepid. The pandemic has changed that to an extent, as companies have struggled with manual A/P and A/R processes in the remote working environment.
In this case, American Express is launching a proprietary system that they are calling American Express One AP. The platform is based on the 2019 acquisition of acompay™ from the Long Beach, CA payments automation company ACOM Solution, Inc.
‘This automated AP enables U.S. businesses to process supplier payments more easily and efficiently. The solution, built on the technology acquired as part of American Express’ buyout of a company (sic) in 2019, offers complete end-to-end payment processing that supports multiple payment methods including virtual Card payments, check and ACH (Automated Clearing House). The service is designed to work seamlessly with businesses’ existing accounting systems.’
This is good timing since the corporate lethargy around modernizing financial processes is receiving a kick in the pants given the spotlight placed on inefficient analog and paper methods since March. Although Amex has numerous B2B solutions available to clients, they are typically based on cards-centric and other lending innovations (e.g. merchant financing) or through partnerships.
This service is an end-to-end payables automation solution that incorporates multiple payment types and easily integrates with company ERPs. Although Mercator Advisory Group has not received a briefing, it appears that Amex is targeting U.S. companies since this market remains a bit of a laggard in terms of B2B payments automation.
‘Per the recent American Express One AP Survey, 84% of U.S. business decision makers feel upbeat about transitioning to a digital payments mode. However, 79% respondents still relied on paper checks for at least some of their supplier payments before the COVID-19 pandemic struck while 44% confirmed that the majority of their payments were not made digitally before the outbreak. Also, 68% of the respondents believe that automated AP will lead to increased efficiency and time saving while 43% voted in favour of improved payment accuracy. Additionally, 37% felt that this method will lead to cost control in the long term while 34% views predict better cash flow management.’
Overview by Steve Murphy, Director, Commercial and Enterprise Payments Advisory Service at Mercator Advisory Group
