Disruptive new technologies promise to shake-up the payments space by offering highly-tailored services to specific market segments. What does it all mean for treasurers? By Simon Brady.
At the fundamental, cross-border infrastructure level, the services offered by banks to their customers are being transformed by new FinTech-driven network initiatives. But for most treasurers, FinTech treasury solutions are service layer integrators that allow companies to plug into multiple external systems and automate one or more treasury processes at the same time.
The choice solutions in the payments space is bewildering, but most are aimed at smaller and midsized companies that need to receive multi-channel digital payments as part of the digitalization of their business and who need to make increasing volumes of low-value payments – for example firms that do business with many small vendors or marketplaces.
Accounts Payable Automation
The drive to remove paper invoices, cheques and purchase orders is hardly new. So ACOM has been automating B2B payments since 1983; Corcentric has been focusing on e-invoicing since 1998 and Comdata, the payment processor and corporate cards giant, was founded in 1969.
However, there is a large group of newer, mostly Cloud-based FinTechs, again often smaller and midsized companies, offering as a stand-alone service for one or more types of payments. These typically offer to make batch payments, via virtual card, ACH or wire, with all payments managed via the legacy ERP system. The automation is not simply the removal of paper, it is the aggregation of data from multiple systems, business units and locations to manage payments in one place with comprehensive reporting.
To give some idea of the number of FinTechs that pitch themselves in the billing and payments automation space, this is a list of just some of those that have been successful enough to raise announced VC funding: Zuora, MineralTree, Nvoicepay, ConnectPay, Paymentus, Payveris, Aria, MyCheck, Fortumo, Tradeshift, Traxpay, Vindicia, Bill.com, Boku Inc (LON:BOKU), Transactis, PaySimple, Danal, Judo and NumberMall.
These companies target specific business types. Zuora focuses on businesses with a subscription model. ConnectPay is a card payment gateway. Payveris is a set of digital tools and APIs designed for small banks and credit unions to allow them to offer digital payments and money transfer solution. Boku is a mobile payments solutions for SMEs. MineralTree focuses on accounts payable for growing and midsized businesses. MineralTree captures invoices as they arrive, routes them for approval through existing workflows and directly executes payments.
