VISA PURSUES B2B PAYMENTS: Visa is partneringwith WEX, a corporate payments provider, to give Wex corporate customers a Visa virtual card for business-to-business (B2B) payments. The partnership will also give WEX access to Visa’s network security.
The firms will likely see adoption of this much-needed solution:
- Digital solutions could simplify B2B payments. B2B payments are complex and challenging for businesses, and tend to be time-consuming and often paper-heavy. Fifty-one percent of all B2B payments in the US are still made using checks. Utilizing digital payments is not only more efficient for businesses, but it’s also less expensive because it could cost businesses $8 on average for every check they write, for example. That’s opened a need for payments firms to meet by creating digital solutions to help improve efficiency and cut costs.
- Virtual cards could be a key tool in B2B digitization. Virtual cards — or single-use, digital card numbers used for payable transactions — are gaining traction across the payments space: They are the third most common form of B2B payments globally, according to a WEX study. In addition to speeding up and simplifying payments, they could be an effective means of preventing fraud. B2B payment fraud is on the rise, with checks being the most targeted payment method in 2017, likely due to their uptick in use for B2B transactions, according to the 2018 AFP Payments Fraud and Control Survey Report. Virtual cards could help reduce that, making them a particularly appealing solution.
Visa is rapidly innovating in the corporate payments space at the right time. Firms that haven’t digitized yet likely want to but haven’t had the resources or the available solutions offered to them. Seventy percent of organizations were “very or somewhat likely” to convert many of their B2B payments to digital within the next three years, according to an AFP survey. Visa has been working to meet the need for digitization in the B2B payments space. Earlier this year, the card giant announced its plan to acquire Fraedom, a payments and transaction management Software-as-a-Service (SaaS) company, which can accelerate Visa’s B2B push. Businesses want digital solutions and will likely turn to an industry leader like Visa to convert their day-to-day processes.