Payment services can be an attrition risk for banks: a new survey of small business executives says almost half would consider leaving their bank if another bank provided better payments services. The study was sponsored by SunGard (SDS)
Hoping to be that "other institution," Silicon Valley Bank has released a new online and mobile payment service. Called "SVB PayAbility," it's designed to integrate with accounting systems such as Quickbooks and the institution's payment system.
SVB PayAbility was built in partnership with payments tech developer MineralTree, which is a client of the $17.5 billion-assets Santa Clara, Calif.-based Silicon Valley Bank. The bank serves tech companies, venture capital firms, private equity firms and wine businesses globally. SVB PayAbility is designed to bridge the two types of electronic systems involved in bill payment by corporates -- the internal accounting engine and the bank's bill pay processing.
The disconnect between these systems often creates extra manual work and document management, which can strain resources. The SunGard survey, which covered businesses of all sizes, says almost half of companies spend more than 40 hours per month processing monthly payments, and a third spend more than 80 hours. Silicon Valley Bank's product is aimed at businesses that make between 50 and 400 payments per month, and typically have expanding accounts payable needs.
"Once a small business gets to a meaningful volume of vendor payments each month, it's a cumbersome process. At a certain point, you have different payees that want to be paid differently, some by ACH, some by card or wire, and there gets to be multiple workflows for that," says Bruce Wallace, chief operating officer of Silicon Valley Bank.
MineralTree designed the interface and built the integration layer between Silicon Valley Bank's payment system and businesses' accounting systems. "[BC Krishna, founder and CEO of MineralTree] wanted to leverage existing payment infrastructure and now has to reinvent new interfaces," Wallace says.
To use SVB PayAbility, users scan paper invoices and other documents involved in a payment to their PC. These images are attached to electronic bill files and new or existing vendor records in the SVB PayAbility Software. These documents are also stored by Silicon Valley Bank in a database that helps drive the institution's payment system. Electronically delivered invoice and payment documents, such as e-bills or PDFs, are routed to the accounting and payment systems in the same manner.
The business user navigates a dashboard to view documents, add comments to bills, select payment type and recommend bills for payment. Vendor addresses, payment history and default payment types can also be viewed on the same dashboard along with data on cash in the general ledger, payments awaiting approval, due dates, and invoice dates. Reports of daily payments and alerts on all actions taken in SVB PayAbility are available. Also viewable on the dashboard are current outstanding payables and a summary of the status of bills and payments; and the number of invoices and other documents that have been uploaded to the application but not yet attached to bills. Business executives access the product on a PC or a mobile device to execute and approve payments.
"All of these payments are sent to the [exec] in a single file that can be viewed[on the mobile device]," Wallace says.
With the product, Silicon Valley Bank hopes to play in the space occupied by firms such as Bill.com, which has been building out a command center for business payments over the past year. There are also tech firms that target the space, such as SunGard, whose solution is called AvantGuard.
SVB PayAbility is also the second major payments initiative from Silicon Valley Bank in in a short amount of time. Earlier this summer, it introduced an international processing hub that handles payments in more than 180 currencies. The institution has also distributed Europay, MasterCard (MA) and Visa (V)-compliant (EMV) payment cards to its business clients.
In preparation for the wider rollout, Silicon Valley Bank has been testing SVP PayAbility for the past couple of months. One of the firms in the pilot, Open Mile, a firm that provides web-based logistics for freight shipping, says it's increased payments nearly 300 percent without having to add headcount.