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Solving B2B’s Payment And Data Problem

Solving B2B’s Payment And Data Problem

June 01, 2021 at 09:00AM
by PYMNTS

In B2B, you cannot solve the payments problem without solving the data problem. They’re inextricably linked, especially when it comes to cross-border, large-ticket transactions. The payments are complex, and as Dean Leavitt, CEO of Boost Payment Solutions, told Karen Webster, there is always some element of data associated with the transaction that both sides need to reconcile.

And that reconciliation is rife with pain points.

 

It’s not enough to solve for the payment piece, he said, as that has been relatively commodified (moving money from account to account is something that financial institutions (FIs) do beautifully, he noted); the problem lies with the data part of the equation.

The back-and-forth exchange of data has been mired in an antiquarian process that is decidedly 20th-century in terms of technology: paper invoices, faxes, phone calls and paper checks. Along the way, data gets lost or is incomplete, creating negative ripple effects up and down supply chains, rooted in smokestack verticals such as manufacturing or logistics.

The current environment (by which we mean the pandemic) is exacerbating the problem, said Leavitt, but has only spotlighted the pain points of sending and receiving remittance details — not caused them. At a high level, he said, Boost has been drawn “like a moth to the flame” to industries where data exchange has been convoluted.

“The verticals that we’re focusing on have had a long history of inefficiencies. And this is just part of a much longer cycle to get these industries in a much better place when it comes to the way in which money and data are transferred,” said Leavitt — and that means pushing them toward digital transformation. That pivot is critical for manufacturing, he said, where it’s been hard for buyers to get the materials they need, as well as healthcare and even certain aspects of telecom.

Easier said than done, considering that there is no standardization in those industries. Firms that want to bring their operations more fully into the 21st century need to accommodate the fact that they need to receive data, ingest it and get it out to other firms across far-flung, disparate systems that don’t communicate all that seamlessly.

“It’s a mess,” said Leavitt. “But we love messes.” Boost, as he noted, has been helping to speed up that modernization process by migrating enterprises to commercial card products via Boost Intercept®, delivering a completely passive straight-through process (STP) experience for suppliers. This speeds up payment timing, reduces days sales outstanding (DSO) and improves suppliers’ working capital positions.

Boost makes accepting commercial cards a painless process, helping to give suppliers a voice in how they want to receive payments and about the timing and fee structure associated with those payments.

“It’s acceptance on your terms,” he said. “There are things you just cannot accomplish with check and wire and ACH largely related to the data. And there’s flexibility with pricing that you just don’t often have with other products.” Buyers can extend their working capital, in effect, without paying for it (as the supplier typically pays for the card transaction).

Looking ahead, he said, Boost has been enjoying the tailwinds of increased interest in commercial cards, with that interest coming from larger firms (typically the business development cycle has been larger for those companies) to automate accounts payable (AP) and accounts receivable (AR) processes. The transactions themselves have been getting bigger as they flow from buyer to supplier. Boost helps to automate these processes, regardless of transaction size, by bridging the gap between buyers and suppliers, making the use and acceptance of commercial cards much easier. That bodes well for the remainder of the year and into 2022, noted Leavitt, as Boost is a volume-based company. The greenfield opportunity is significant, as less than 50 percent of corporate spend is done on commercial card rails.

The Fundraising  

The conversation came against the backdrop where the company said earlier this month that it had received $22 million to expand its commercial card technology. Leavitt said the capital will be deployed across the firm’s operation in a “multi-faceted” way.

A significant portion of those resources will be earmarked for the company’s international efforts. Leavitt noted that the company operates in 36 countries across a variety of different alliances, with proverbial boots on the ground in as many as 10 regions that will get additional focus.

A number of verticals — such as freight, logistics and manufacturing — will receive more attention, and the firm will hire what Leavitt termed “subject matter experts.” The company will also add more staff to its technical products and solutions teams to enhance the Boost platform.

“It’s largely about people,” Leavitt said of growth efforts. “We’re not a capital-intensive business.”