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The growing acceptance of virtual cards, sometimes referred to as v-cards, by small to mid-sized businesses (SMBs) is increasing exponentially as suppliers embrace the improved security and convenience of this digital payment method over paper checks.

But for most, the manual work of processing and reconciling the payments remains a challenge.

While there are automated reconciliation and straight-through processing (STP) solutions for large businesses, small businesses, in particular, continue to be underserved due to their smaller and less frequent invoices. Things appear to be changing, however, as fintechs realize the commercial value of serving this massive market of 5 million potential customers.
Straight-through processing is a method used within the payment ecosystem to speed up the processing time of the two main processing components of remittance and settlement. Its objective is to streamline payments, so that once a transaction is initiated, all activities associated with the payment processing are automated from start-to-finish without manual intervention.

STP allows buyers and suppliers to electronically share information for quicker, more secure and effective transaction processing. When businesses adopt STP solutions, errors are reduced as accounts receivable employees are freed up from manually entering information and verifying whether a transaction has fully processed.

According to the Association for Financial Professionals, 47% of organizations currently use STP to manage some of their payments and 44% use STP to manage some receivables.

These are typically large businesses for whom sophisticated end-to-end payment cycle management solutions that automate manual tasks have been developed by third parties. In some cases the businesses themselves have the resources and scale to develop their own solutions, such as proprietary payment portals.

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