[PODCAST] Visa Re-Imagines the B2B Payments Industry

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The following is a transcript of the podcast episode hosted by Ryan McEndarfer, Editor-in-chief at PaymentsJournal.com

Glad to have you here. There’s a big focus for Visa on business-to-business payments. Can you tell us about Visa’s strategy in the B2B market segment?

Taira Hall – Head of Partnerships for Visa Business Solutions

I’d be happy to. To provide some broader context on the landscape: We’re all experiencing a time of rapid change and innovation in B2B payments in businesses. We know that many businesses are still using antiquated ways of paying and getting paid. What we’re trying to do at the network level within Visa is to seek easier ways to make and receive payments. In terms of the market size and where we see some of that coming to fruition, the global payment volumes are rising (for one business paying another) is in excess of $120 trillion annually, and that’s significantly larger than the payment volume for consumer purchasing. That’s why Visa as a company is laser focused on both investing in those existing solutions as well as embracing emerging B2B industry players who can help us expand into network payment flows, a lot of which I’m hoping to talk to you about today. We’re very excited about the B2B market segment for Visa, and we believe that we can effectively enable a differentiated commerce payment experience that better meets the needs and expectations of people working in businesses day in, day out. A lot of that will also be as we focus on the already close to the $1 trillion in payment volume at a network level that we’re seeing on B2B.

Congratulations on reaching that milestone as the market continues to expand onward and upward. I know that on November 5, 2018, you will have some really exciting breaking news. So can you tell us about that?

Taira Hall – Head of Partnerships for Visa Business Solutions

Absolutely. Visa will be announcing on November 5 a collaboration with BillTrust. BillTrust is a strategic fintech partner for us in the B2B space. We’ve had a partnership in place with them for some time. Specifically what we will be announcing is our collaboration on the Business Payment Network called BPN. The BPN is designed to streamline the delivery of electronic B2B payments to suppliers. With that in mind, what we love about the BPN is that it’s a unique supplier-driven B2B payments network that in essence will provide a transparent registry of suppliers who accept digital payments and will give our buyers and financial institutions the necessary access that they need to automate what has historically been a very complex process. The Business Payment Network, BPN, makes it easier than ever to harness the increasing efficiencies, greater security, and lower costs associated with processing digital payments without needing to make significant changes to existing infrastructure. That’s really key for Visa because we have heard directly from buyers, suppliers, and financial institutions that anything we can do to minimize the technological lift that’s required is critical in terms of how they look for new solutions that can be meaningful and impactful to them in market.

Ryan McEndarfer – Editor-in-chief at PaymentsJournal.com

You are right on point there, saying in effect, “How can I best fit with what you already have, NOT I have to dig up the entire foundation to make this new system or new product that we have work for you.” Glad to see that your organization is looking at how can it best integrate with what’s already available and what’s there. That being said, let’s shift gears.

Can you tell me what is the biggest pain point that suppliers today are experiencing as relates to the B2B payment space?

Taira Hall – Head of Partnerships for Visa Business Solutions

We spend a lot of time looking at that space in depth of course. One of the stats that resonates with me is that estimates show that paper checks still represent roughly 51 percent of U.S. B2B payment volumes. The ubiquity of check acceptance in the U.S. has, in my mind, been a key reason that check has remained the leading form of payment despite its many disadvantages which we’re aware of. As an ecosystem of buyers and suppliers recognizing the advantages of digitizing payments – – things such as less manual touch, improved fraud controls, enhanced reconciliation, timeliness of payments – what we’ve seen in the industry landscape is a lack of connectivity between existing B2B payment platforms. That’s one of the largest barriers to adoption. Suppliers simply don’t have the system and processes in place to accept the increasingly complex forms of payments that buyers and their financial institutions want to send to support their own payment needs. So when Visa went out to the market to reimagine the space and in this collaboration with BillTrust, we thought about how to break down some of those barriers to adoption. We believe that with this collaboration, with the Business Payment Network, we can help those financial institutions and their corporate customers in the space but keeping that very supplier-centric approach of understanding how do the suppliers need to get paid? What sort of data and reconciliation is critical for them? And then how can they be able to have visibility into what’s happening across their various buyers in the ecosystem?

We touched on this next question, but I’d like to do a dive if we could. How does the Business Payment Network, or BPN, tie into Visa’s strategy in view of the evolving payments industry?

Taira Hall – Head of Partnerships for Visa Business Solutions

The BPN for us is tying back to that strategic pillar of expanding into new payment flows. As we think increasingly about the role that integrated payables and receivables providers provide to the space, we want to be working with players and providing solutions that reduce much of that manual corporate process today. Through both automation and providing corporations a process that, as I talked about, doesn’t force them to change what they’re doing today in terms of their existing infrastructure or their enterprise resource planning, or ERP, integrations. With BillTrust and the Business Payment Network, this becomes an ability for Visa to go beyond existing solutions and be able to say that we really are expanding the ecosystem. These new payment flows and bringing, in collaboration with BillTrust, new technology to the space.

Can you tell me more about Visa’s work with partners to enhance the overall B2B payment experience?

Taira Hall – Head of Partnerships for Visa Business Solutions

We spent a considerable amount of time not just surveying the broader ecosystem but also collaborating with financial institutions, technology platforms, and merchant service providers to streamline the manual processes – those in the arena of integrated payables and receivables. We work today with a range of other partners in this ecosystem, including Bottomline, Nexus, Priority Payment Systems, CSI, Mineral Tree, and others, to think about how can we increase penetration of digital payments for corporations and provide meaningful market capabilities around Visa’s own capabilities specific to supplier match, supplier enablement services, and our range of Visa B2B application programming interfaces, or APIs, to support these flows. The Business Payment Network will allow Visa to support the execution and reconciliation of multiple payment types for both buyers and suppliers. And so while paper checks make up the shrinking percentage of business payments today in the United States, the reality is that Visa plays an enormously important role in converting some of those check payments to digital. We’re working to be instrumental in streamlining those processes between Accounts Payable departments and our partners that can help reduce friction within the payments ecosystem.

Before we wrap things up, I’m really curious to get your take on this. As we look into the future of the B2B payments industry, how is Visa reimagining this space?

Taira Hall – Head of Partnerships for Visa Business Solutions

As we at Visa celebrate our milestone 60th year, we continue to strive to foster Innovation for our clients and partners of all sizes globally. Specifically for those businesses that continue to grow and need solutions to support their growth, we believe we’re going to see a corresponding evolution of digital solutions in all aspects of payments from access to enablement to initiation. We also expect that the global nature of payments around the world will continue to evolve to address the need for speed, transparency, and optionality. And we believe there’s widespread demand for the consumerization of B2B within the payments landscape and for simplicity in cross-border payments. So a lot of the focus within Visa Business Solutions will continue to be on innovating with partners to meet the needs of financial institutions and their clients around the globe and specifically to focus on some of those core areas. Just two weeks ago we announced our new product details with respect to our B2B Connect solution. That was in preparation for its first quarter 2019 product launch. To give you an example there, B2B Connect is a nonhard platform that Visa has developed to give financial institutions a simple, fast, and secure way to process business-to-business payments globally. Commerce has no geographic boundaries, and we have developed B2B Connect to help our financial institution clients and their corporate customers mitigate the well-known pain points of international payments. Partners again will be critical to our success within that arena as well. For B2B Connect we announced that we’re working with both IBM and Bottomline. On the IBM side, we’re integrating open source Hyperledger Fabric framework from the Linux Foundation with Visa’s core assets to provide an improved process to facilitate financial transactions on a scalable permission network. We believe that close collaboration between Visa and IBM will enable smooth integration of B2B Connect for our mutual clients and into the many new ecosystems that are evolving. The other thing about that relationship is that it also highlights Visa’s commitment to ensuring frictionless cross-border payment experiences with the utmost security, trust, and transparency. Bottomline, another partner that I mentioned earlier, will be the first partner to integrate with B2B Connect. With that integration, Bottomline’s financial institutions who participate in B2B Connect can gain easy access to the B2B Connect platform without the need for complex technological upgrades. So I think, Ryan, that across the ecosystem, there are a number of key areas both within the core payment flows where Visa is focused and we are expanding into new payment flows and new arenas. We’re doing all we can at the Visa Network level and with many of these strategic partners to accelerate that evolution and to ensure that we’re at the forefront of bringing the solutions that businesses need to the market globally for the customers that we used that we serve. We’re very excited to be doing that.

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