It's a common lament that businesses cling to checks and other forms of paper-based transactions while consumer payments rush into a digital future.
Nvoicepay CEO Karla Friede is on the front lines of removing this last mountain of paper from the payments industry, and contends more direct lines of communication can eliminate the lingering factors that keep businesses using older forms of communication.
The company is opening its platform to facilitate communication. "It's not an API structure, but more communication between buyers and suppliers to increase efficiency," Friede said.
The details in these communications can vary, but usually include information about the shipment itself such as size, amount and shipping dates. All of these can change in the course of a project, and a change in any of those elements can affect the payment.
In some ways, it's like transporting the social payment app concept to business payments. Much like Venmo lets users attach messages and emoji to P-to-P payments, Nvoicepay wants communication to become the focus of a shift to digital payments.
In business supply chains, the details are far more complex than splitting rent or a dinner check. "An ongoing dialogue can resolve differences in a shipment or procurement before it becomes a payment problem later on," Friede said.
Nvoicepay is adding more functions to the business payment venue as an attempt to create a "value add" where business payments accompany other processes. A recent collaboration between Nvoicepay and Coupa Software incorporates supply management, requisition, purchase orders, receiving, invoice reconciliation and accounts payable in a single workflow.
Nvoicepay also hopes these improvements in efficiency will move business payments narrative away from inertia keeping payments paper-based, or the idea that sending a paper check can give a company a chance to "delay" the actual payment because of the slower speed of the mail. By adding broader supply chain and order information and allowing more open communication among parties through its invoicing system, companies can still time payments to fit their financial needs, Friede said.
“Automating payments does not dictate timing," Friede said. "Customers control who they pay, when they pay and how they pay…..automation is separate from timing.”
There are also cash position arguments in favor of faster B-to-B payments. By moving from a two- to three-day ACH transmission where a business funds payroll on a Tuesday to pay on Friday, same-day ACH allows business to fund on Thursday, said Michael Moeser, head of the payments practice at Javelin Strategy & Research. "Similarly, B-to-B payments which have traditionally been the bastion of the paper check are also seeing the value in transmitting payments more quickly to open up credit lines," Moeser said.