Much like the consumer retail acquisition market, business payment companies are expanding the appeal of transaction automation by tying it to international growth and value-added merchant services.

"There is a bigger market for stuff outside of billing and payments. Things like credit decisions, collection software and merchant service providers," said Flint Lane, founder and CEO of BillTrust.

BillTrust is expanding its Quantum product to address more merchant needs, as well as broaden its international reach.

Flint Lane, founder and CEO of BillTrust
Flint Lane, founder and CEO of BillTrust

Much in the way mobile point of sale apps promise to address issues such as inventory management, CRM and sales performance, Billtrust is pushing a system in which automated payments are embedded in the background to other tasks.

Billing, for example, can link to an enterprise resource planning system, tailoring invoices for payees and the eliminating manual pairing of bills with actual payments.

"You're seeing a recognition that a company isn't going to survive just on e-invoicing," said Steve Murphy, a commercial and enterprise payments analyst at Mercator Advisory Group.

Billtrust's ambition has drawn attention from investors, including a new $50 million infusion from Riverwood Capital Management. Billtrust also recently developed Virtual Card Capture, software that routes virtual card payment instructions from banks and accounts payable departments to Billtrust for processing. It's designed to eliminate manual processes for receiving payment instructions from a third party, keying a card number and applying the remittance details to their ERP systems.

"B-to-B is a massive market, it's a trillion dollar opportunity," said Francisco Alvarez-Demalde, founding partner at Riverwood Capital Management, adding about 60% of all U.S. payments are still check-based.

The addressable market represents trillions of dollars in yearly global volume, but is still stuck in the relative past of checks and paper invoices.

"Most people are looking to drive customers off of paper to e-billing," Lane said. "We're looking at the regulatory environment in different countries and the rules around data privacy. Most companies don't want to manage data outside of their country."

To encourage automation in this market means conquering inertia, and Alvarez-Demande said one way to do that is to streamline the operations that accompany the payment. That is where his firm is looking for opportunities to invest in technology providers that try to unlock digital payments by unchaining business processes.

"Companies are struggling to keep up with their operations, and giving their clients an invoice and a way to get paid can solve that," said Alvarez-Demalde.

Billtrust faces competition from First Data and MineralTree, which recently teamed up to boost usage of virtual cards for B-to-B payments. Visa and Mastercard have also reached out to developers to build applications to automate B-to-B transactions.

"Automation is taking place in this market. It's not as fast as other types of payments but it is near a tipping point," Murphy said. "There's a lot of activity in the last nine months."

Subscribe Now

Authoritative analysis and perspective for every segment of the payments industry

14-Day Free Trial

Authoritative analysis and perspective for every segment of the industry