Looking for ways to expand your organization’s Commercial Card usage in the next decade? Three growth areas are described below in the article by industry veteran Mark Silverman. Recharged Education is delighted to feature his perspectives once again.
Commercial Payments in the Next Decade
by Mark Silverman, PayTech Group
Consultants as a group try, or at least should try, to avoid predicting the future. And when we do prognosticate, it’s usually a good thing that no one keeps score. But as this decade comes to a close, we can at least look back at the last ten years to get an idea of what the next ten might bring.
Most of the innovation in payments over the first part of this last decade revolved around serving the consumer space. Chip and signature. Mobile wallets. Payment facilitators. Sure, virtual cards were around ten years ago, but only in its most rudimentary form, and marketed mostly as an evolution from ghost cards and card-not-present transactions.
But during the second half of the decade, FinTech investment started to pay attention to the B2B payments environment. And today nearly every bank in the U.S. has some sort of strategic or tactical partnership with a non-bank technology company to better serve their enterprise customers.
Some areas of growth for commercial cards to look at in the next several years include:
Catalog Purchasing: In the past this has traditionally been the domain of the Aribas of the world. But as the need to automate increases, more options for purchasers have hit the marketplace, whether third parties like Amazon or supplier-hosted sites like Grainger. And most of these options make non-card usage somewhat difficult and are, therefore, conducive to increased commercial card (preferably virtual card) usage.
Fleet/Fuel: The emergence of Internet of Things is mostly focused on the consumer environment, with perhaps the notable exception of when that “Thing” is the car. Both the payment networks and the traditional fuel card companies are aggressively looking down market at smaller fleets, as even fleets with just a handful of vehicles can benefit from a card solution, whether the purchase is traditional fuel or made at a charging station. And much like with catalog purchasing, as connected cars become a reality, it makes sense that commercial cards in one shape or form will play a part.
Straight Through Processing (STP): Okay, we’ve heard this before, but, really, how has STP not taken off more? One of the main objections on the supplier side to ePayables is the work involved processing a payment, going onto a portal to complete a transaction. Education from the provider side on why STP solves most of this concern is still needed, as while there are several STP options out there today, it is still not the standard.
To really tie these concepts together it becomes even more imperative for companies to develop a true payments strategy; that is, which payment method makes most sense and where. More so than any singular technology solution, this is really the true opportunity for B2B payments going forward.
About the Author
Mark Silverman is a Senior Consultant at PayTech Group, a payments advisory and consulting firm, specializing in helping both issuers and buyers of commercial payments via engagements ranging from sales effectiveness to research to vendor selection. He has shared his expertise in commercial payments while chairing and moderating panels at payments conferences sponsored by EuroFinance, NAPCP and PayExpo. Prior to consulting Mark spent several years at both American Express and U.S. Bank in a variety of leadership, business development and marketing roles. Mark can be reached at mark@paytech.no.
See also Mark’s other article published by Recharged Education: What the U.S. Commercial Card Market Can Learn from the Rest of the World.
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Lynn Larson, CPCP, is the founder of Recharged Education. With 20 years of Commercial Card experience, her mission is to make industry education readily accessible to all.