Comerica Pitches Corporations on the Beauty of ePayments

Corporations are spending less in response to global economic stress, but the outlook isn't all bad for the banks that process corporate payments.

In fact, it's an ideal time for them to pitch new payments automation as a way clients can proactively corral spending and improve vendor management.

Comerica, for one, hopes to expand payment relationships with its corporate clients by increasing the breadth of digital payments. The bank is positioning digital payment cards and web/mobile access as a way for corporations to improve negotiation power with suppliers, bring more visibility into cash positions, process payments faster and remove paper from more types of payments.

"People are used to using a commercial card for travel and entertainment or for fuel, but they haven't thought about paying healthcare benefits or office supply vendors," says Bridgit Chayt, national director of treasury management services for Comerica.

Comerica has embarked on an automation initiative that's focused partly on its corporate clients' suppliers, giving corporate clients the means to sell suppliers on the benefits of digital payments while saving costs at the same time.

While there's been some headway in automating corporate payments, with lots of banks and other firms targeting the market, paper checks and invoices still prevail for most suppliers and service providers.

"Sometimes it's a 'crawl, walk, run strategy' where we may have customers that are just starting to automate payments, but don't take full advantage of the commercial card opportunities or all payments types," Chayt says.

Comerica integrates various payments types into a single web view for the corporate client, who can see scheduled payments, past transactions, bills due, etc.

This information can be matched with the business rules engine via a direct integration with the corporate client's back-end accounting system, which makes processing faster, more accurate and viewable through a centralized portal.

"If [corporates] get more information, it helps them do cash forecasting with stronger internal budget tracking," Chayt says.

Since there's also more visibility into actual suppliers, Comerica says it can help manage vendor relationships.

"Middle market or large corporations may not realize that different departments were using the same vendor. This consolidation helps you realize that you're spending more with a single supplier than you may have thought, and that gives you more negotiating power with that supplier than you may have thought," Chayt says.

While that's probably not attractive to vendors, Chayt says the faster processing and quicker resolution of issues connected to payments should be.

"It's a win-win. Some vendors say they are not interested in paying discounts. But what we have found is if you interact with those vendors, the fact that they get their funds faster and they will have ease of payments helps [address] those barriers."

Other banks are also selling corporate clients on using automation to improve vendor management; Bank of America, JPMorgan Chase and Citigroup are among those recently introducing new services.

At Citi, the bank attempts to improve reconciliations by providing full remittance details via commercial card payments, a CTX addendum (corporate trade exchange formatting), or by making remittance data available on demand through a supplier portal/email notification.

Deirdre Ives, head of wholesales cards and person to person payments in North America at Citigroup, says clients are increasingly expressing interest in Citi's file-based Commercial Card offerings to drive greater control, process improvement and financial benefits within their accounts payable departments.

She says this also includes Citi Buyer Initiated Purchasing Card (BIPC), a file-based commercial payment solution that allows buyers to "push" a payment directly to a supplier's merchant account.