The Global Enabled Supply and Demand Chain Series: Payment

If one begins with the purchase card providers — American Express, MasterCard and Visa, GE Capital, and U.S. Bank — their most recognizable offering is their ability to track the complexities of payment initiation and remittance and reconciliation on a corporate purchasing card. But much more is going on with the card providers.

For example, both Visa and MasterCard have invested expenditures in new product offerings to make the most of the utility of corporate purchase cards as well as to facilitate non-card payments for B2B transactions. In the case of MasterCard, their MasterCard e-P3 solution also complements the benefits of purchasing cards and makes available an ACH-like solution through its electronic bill payment and presentment service.

Most of the card providers have begun to approach the payment market through partnerships, establishing their footprint in the B2B space. MasterCard, for example, in collaboration with a South African technology company, developed and launched globally its MasterCard SmartLink for enterprise resource planning (ERP) systems, which feeds data directly into a company's ERP system. MasterCard, along with its partners Xign Corp. and Velocent, a unit of eOneGlobal, also provides a solution that integrates the purchase card into billing and payment automation (BPA) systems.

Meanwhile, card providers today can support BPA technology with such automation features as buyer-approved electronic payments, online invoicing, payment status availability and improved data capture and reconciliation, as well as support for more payment options and ACH.

The more traditional third-party providers are in the thick of it, too. The electronic invoice presentment and payment (EIPP) providers such as Avolent, BCE Emergis, BottomLine Technologies, Pitney Bowes docSence and edocs are emerging as the players to assist companies in satisfying their one-to-many and many-to-many needs as they refocus and change their business models.

The market then has the payment hubs such as Velocent (formerly BillingZone), Burns, TradeCard and PeopleSoft, as well as electronic payment providers like Clareon (which is now part of FleetBoston Financial Corp.) and Xign.

Some of these players are well-established brands with deep pockets, while others are privately funded startups. According to the analysts, the entry of large, well-financed players raises the bar for others in the space, making success for competitors without large wallets seem difficult — assuming these well-funded players can move beyond their credit card roots. Both have the networks and computer systems to manage B2B transactions, as well as strong brand names.

One analyst suggests that for the biller side, four of the strongest players are BCE Emergis, Bottomline Technologies, CheckFree and BillingZone, now part of Velosant. For the payer-side, Xign, Bottomline Technologies, iPayables and U.S. Bank's PowerTrack are recognized as very strong contenders.

Says Paystreams' Ijams: "Banks are coming into the [B2B payment] space in a new way, showing that the market is becoming a more critical component of their treasury management offerings, as well as a more strategic component."

Adds TowerGroup's Robertson: "The newest thing the players are focusing on involves billing and remitting oriented products geared toward payers. In the past, the solutions were more biller-centric. This additional piece extends functionality and allows payers to receive invoices electronically in the manner they want. It also allows more streamlining for the biller side, too. This new aspect allows parties to send and receive bills electronically without the biller making a direct investment in electronic billing technology."

An even bigger opportunity in the payment space on a national level may give the players — especially banks — even more incentive to truly make the financial process seamless. Both houses of the United States Congress have passed legislation that allows banks to exchange electronic check images and use them in place of the actual checks. The legislation, dubbed Check 21 for the Check Clearing for the 21st Century Act, should win quick approval by this fall.