Visa Inc. V has partnered with Billtrust's Business Payments Network (BPN) for providing enhanced payment services to its customers in the business to business (B2B) market.
Billtrust's payment network offers a rooster of suppliers and their payment acceptance preferences. It will provide a connected platform for suppliers, buyers, financial institutions, and accounts payable and accounts receivable software providers. BPN will also provide financial institutions and corporate buyers an ability to deliver digital payments directly to the suppliers' acceptance platforms. Additionally, this payment network will ensure complex financial and payment data to seamlessly come together at scale while delivering streamlined reconciliation to suppliers and buyers.
Visa has an existing partnership with Billtrust that was forged in 2017, in order to provide payment services to B2B market through the integration of Billtrust's Virtual Card Capture and Visa's Straight Through Processing solution. With the latest deal Visa will use Billtrust's BPN to enhance payment services for financial institutions, corporate buyers and B2B suppliers.
Notably, the new services are being aimed at the B2B markets, where the suppliers preferred mode of payments still remain paper checks. Recent estimates show that paper checks still represent roughly 51% of U.S. B2B payment volumes. Though they have started to realize the benefits and ease of digital payments, absence of a full-fledged digital payment network remains a deterrent for B2B market participants.
Furthermore, there remains a huge untapped market in the B2B space. Estimates shows that the U.S. B2B payments market ranges nearly $24 trillion annually. Thus, streamlining efficiencies by adopting innovations such as virtual card payments and other digital payment types can lead to billions of dollars saved for participants in the B2B market and a solid business for Visa.
Despite significant automation and digitization in the payment space, the B2B space lags in technological advancements that exposes them to huge administrative cost and friction in carrying out business efficiently.
Per CB Insights, B2B payments hold the largest total addressable market within payments. It estimates market sizing of B2B payments to be a more than $20 trillion market by 2020. B2B payments are often analog, involving paper invoices and long payment cycles. Even though more businesses are embracing the use of electronic modes, digital payments remain only a small percentage of total B2B volume.
The B2B payments market, therefore, remains underpenetrated and thus offers huge scope for growth. Currently, players such as Mastercard Incorporated MA , Square, Inc SQ and PayPal Holdings, Inc. PYPL are looking to expand into B2B payments.
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