From Tesla to transactions: How the electric vehicle market inspires B2B innovation
Denise Leleux has worked in financial services for more than two decades, but it’s a detour to Tesla’s marketing department that sparked an idea as to how accounts receivable and supply billing can take lessons from the transportation market.
“Who doesn’t want to take Uber of Lyft because you don’t have to worry about the cash or card?” said Leleux, who’s been senior vice president of supplier services at AvidXchange for about a year and is helping to lead a major B2B expansion project.
B2B payments are a large, clunky market that’s attracting the interest of the largest banks, fintechs and payment companies, all wanting to swap out the legacy payment systems that most small to medium-sized businesses with something that resembles a consumer’s mobile experience.
Mobile ride-sharing apps like Uber, Lyft and Grab have figured that out, and like Amazon are pivoting to myriad financial services off of a reliable and growing enrolled base of users.
“I would love to be known as the person who did that for B2B payments,” said Leleux. “We want to scale and grow the supplier business and make the payments easy, to encourage the suppliers to look for value adds.”
That’s where electric cars come in. At Tesla, Leleux headed global customer experience in 2017 and 2018. Tesla drew a lot of attention early on, mostly due to technology such as its fast-recharching batteries; and the personality of its founder, Silicon Valley billionaire Elon Musk. Musk was one of the founders of PayPal, and has more recently fended off speculation he’s behind the creation of bitcoin. He's also launched a rocket containing a Tesla vehicle to Mars.
Beyond the high-tech spectacle was a challenge. Tesla rapidly scaled production in 2018 to support its mass-market sedan. That required changes to make the technology more understandable and accessible to a wider audience, which needed service and information faster, Leleux said.
The greater scale made Tesla a tangible product with users that had some technical knowledge but required more communication.
Leleux worked to adjust service from a virtual and remote model to a system that relies more on service centers and personal communication. A wider range of users needed more information about warranties and repairs.
“The need was to get past simple execution and to provide service and communication quickly,” Leleux said, adding Tesla’s management culture stresses speed to market and an emphasis on experience ahead of transaction.
The same challenge afflicts the fintech and payment automation industries, Leleux said.
“Banks are very tried and true and have the trust of their customers,” she said. “Fintechs are creating disruption but don’t have the distribution.”
The Charlotte-based AvidXchange’s strategy for the next year is to build a network of buyers and suppliers that enables digital payments through AvidXchange’s paperless accounts payable and invoice management software.
AvidXchange has raised funds from Mastercard to build out its B2B technology, and just released new invoicing software for health care B2B payments. The health care invoice product supports accounts payable with e-payment choices and access to a network of more than 500,000 suppliers such as equipment vendors that serve most of the health care and social service business.
AvidXchange estimates 75% of the payments in this market are still made with checks, providing room to extend digital payments by smoothing connections between buyers and sellers along the supply chain.
Leleux's other experience will help in this case. Before Tesla, Leleux In customer experience management roles at eBay, First Data, Citigroup, Visa, Barclays and Capital One.
“eBay taught me about a marketplace of buyers and sellers, with eBay in the middle,” Leleux said.
AvidXchange is part of a large market that's trying to modernize supply chain payments, particularly among small businesses, which make up 44% of U.S. economic activity, according to the Small Business Administration.
But there's a challenge. Writing for PaymentsSource, Dean Henry, executive vice president of global business financing and supplier payments for American Express, said for small and medium-sized businesses, "economies of scale are out of reach and modern technology hasn't quite caught up, meaning [the businesses] are unable to take advantage of the conveniences, cost savings and efficiencies that come with modern technology."
To reach smaller businesses, other firms are partnering up. Citigroup recently teamed up with digital invoicing company HighRadius to provide scale and easier payments execution for supply chains. Visa has also entered partnerships with technology companies to address automation gaps and firms such as Sydney-based Troovo have used artificial intelligence to integrate B2B payments with expense management and accounting.
Lloyds Bank in the U.K. has partnered with commercial banks to link buyers to suppliers, and Amex recently acquired acopay, a digital payment automation platform, from ACOM Solutions.
“The partnerships between fintechs and financial institutions is a marriage we’re all catching on to,” Leleux said.