Last week we announced the launch of Supplier Enablement.
This new data product has been developed in close collaboration with leading commercial card issuers. It is already in production and making life easier for JP Morgan Commercial Banking and their business customers.
Why are we launching Supplier Enablement now?
Over the past eight years we have been privileged to work closely with exceptional teams at leading financial institutions. These partnerships drive our product roadmap forward: through our clients’ use of our products; through their participation in initiatives like our Product Advisory Board; or through in-person workshops like those we have been running with banks across the United States as part of our product launch.
Scaling the use of virtual cards for B2B payments, especially across the middle-market ($10M-$1B annual revenue), has been a consistent theme.
U.S. businesses pay each other $27 trillion every year. About one-third of that is still moving via cash or check. According to the Federal Reserve, about 82% of those B2B checks were for $2,500 or less.
Moving more of that spend to virtual card results in faster, more secure, and more easily reconciled transactions. Virtual credit cards provide seamless access to a line of credit to boost the working capital position of both buyer and supplier.
At a time when middle-market businesses are growing faster than any other segment of the economy and also experiencing pressures on cash flow, many banks are prioritizing the middle-market opportunity and seeking to build stronger, direct customer relationships that can scale thanks to updated technology.
What problem are we solving with Supplier Enablement?
Banks play a critical role in advising their customers on available payment methods. In collaboration with card networks, consultants, and software vendors, issuing banks proactively support their customers in setting up card programs and enabling customers’ suppliers to accept card payments.
Again and again we heard from financial institutions that the same problem was holding them back – access to data.
Access to data is a problem for both customer and issuer. In a recent Mastercard survey of 300 executives at lower middle-market companies, 70% reported that a “separate cumbersome process” was a challenge to their adoption of virtual card for B2B payments.
Data is a challenge because B2B payments are complex workflows requiring lots of information. Even an initial question such as understanding the size of the rebates a business could earn by adopting virtual card is a relatively difficult task.
Finance teams must export data from ERP systems and accounting software and manually create consolidated vendor files. Collaboration between banks and customers is hamstrung by the complexity and size of the files involved, differences in how businesses organize their Accounts Payable, and in how data are structured in different ERP systems and accounting software.
This problem recurs throughout the commercial card customer lifecycle. Sharing data between bank and customer creates friction. Weeks of delay to key processes means fewer card programs set up, fewer supplier campaigns run, and missed opportunities to optimize spend over time.
How does the new Supplier Enablement data product solve the problem?
Building on years of work helping financial institutions solve access to business financial data at scale, our new data product meets the specific requirements of commercial card issuers aiming to drive volume in B2B payments.
Supplier Enablement enables issuers to move from a status quo of manually-compiled, static, incomplete, inconsistent files shared back-and-forth to a world where banker and customer can collaborate seamlessly over a shared, comprehensive, and constantly-refreshed view of their supplier relationships and spend data.
Easy and Secure Authentication Journey
The source of truth for supplier and spend data is the ERP system or accounting software. Rather than export a spreadsheet from this software and try to map thousands of records to the right format, customers can simply consent to share data securely via API.
The difference in customer experience is stark. An unrewarding task that can take hours becomes a process that takes a few minutes, often in the course of a conversation with a Relationship Manager. As no credentials are ever shared and all data is encrypted, the process is much more secure than sharing files over email.
Consistent and Comprehensive Supplier and Spend Files
Once customers have consented to share their data, the relevant stakeholders can access a Spend Analysis. This dataset contains everything required for successful collaboration over a card program, including bills and their status, payment methods, supplier contact details, payment terms and more. The data are available in the same format every time, regardless of the customer’s size, industry, or which software they use.
Analysts, Product Specialists, and Relationship Managers have deeper insight into every customer, allowing them to do their jobs faster and more effectively. Data can be ingested via API into the systems that issuers already use or simply downloaded in a consistent spreadsheet format.
Monitoring and Data Refresh
A critical advantage of API-based data sharing over static vendor files is the ability to refresh the data. Issuers can monitor programs and grow spend per customer over time thanks to persistent connections that keep them in close touch with their customers.
Rather than constantly request more data and become mired in administrative tasks, Relationship Managers and other customer-facing teams can spend their time with customers on more helpful and profitable initiatives, boosted by deeper insights into their business.
What is the impact of Supplier Enablement for issuing banks?
Access to data is a root cause of issues throughout the commercial card customer lifecycle. By solving this problem with our new Supplier Enablement product, issuers are seeing immediate impact across a range of key metrics.
Increased Sales Acquisition
Issuers convert more customers who are interested in setting up a virtual card program thanks to a streamlined sales process. When customers can share comprehensive and up-to-date supplier and spend data in minutes, both issuer and customer can quickly assess potential savings and present accurate and compelling rebate offers.
Faster Speed-to-Spend
Issuers accelerate speed-to-spend by between 30 and 90 days by removing points of friction in the sales process and beyond. Seamless access to the right data in the right format means the process of setting up a card program and starting to onboard suppliers is faster and more efficient.
Increased Spend Migration to Card
Issuers migrate more spend to card and increase transaction volume per customer. Supplier outreach campaigns are more effective as they are based on higher-quality data. Supplier contact details are up-to-date and suppliers can also be reached with more relevant messaging thanks to deeper insight into their current relationship with the customer.
Reduced Spend Churn and Continual Growth of Spend on Card
Issuers are retaining and growing volume per customer over time thanks to an ongoing, shared view of all the critical data. Every year around 15% of the spend on a virtual card program can churn and at least 10% of spend is with completely new suppliers. With a constantly updated picture of a customer’s card program, issuers can proactively prevent churn and target new suppliers as they appear in the file.