AI may streamline development of B2B payments automation

As both large payment processors and fintechs are attracted to the market opportunity presented as B2B transactions start to digitize, one vendor hopes to stand out with an AI-based workflow.

Sydney-based travel payments company Troovo recently debuted a system that links automated enterprise payments across enterprise resource planning systems, credit card processors, and banks in multiple currencies.

That comes as relatively larger firms make acquisitions — such as Global Payments’ deal to merge with TSYS — in part to link digitized B2B payments with broader merchant functions.

In Troovo’s case, it’s using a rules-based robotics process automation engine to integrate expense management platforms, paper-based payments and accounting systems. Robotics process automation, or RPA, refers to an AI-supported workflow. Traditionally, software developers write a program to automate a task and use APIs or language to connect a transaction to the back end, such as an ERP system.

RPA uses machine learning to “watch” users perform a task, then build the automation directly, which is designed to eliminate development steps.

Troovo says this style of development can extend its B2B use cases beyond travel payments to other tasks related to vendor management or supplies by streamlining how data is entered, tracked and analyzed.

“We’ve looked at all categories of spending, including travel,” said Kurt Knackstedt, CEO of Troovo. “And there are a lot of clunky and inefficient processes.”

In financial services, AI is helping to improve messaging, security, debit card issuance and other tasks that involve manual processes. For travel payments, it’s expected that AI can aid risk management and T&E rules compliance by quickly sifting through and analyzing payments data.

“We’ve found in travel there are multiple suppliers and multiple payment types all in the same transaction record,” Knackstedt said. “We’ve found that robotics can crack those differences and can be applied across other types of B2B spend.”

AI and B2B payments are also playing a major role in this year's wave of large payment company mergers.

At FIS, which is in the midst of acquiring Worldpay, executive Bob Legters has changed roles from chief product officer to chief data officer for payments. FIS says the data that powers AI and machine learning can drive new product development on a variety of fronts for both consumer and business-facing products.

And at Global Payments, which recently agreed to acquire TSYS, pushing B2B automation is a major driver behind the companies’ consolidation. Global Payments found TSYS’ strength in small to medium-sized businesses, and B2B automation, as attractive attributes.

The pending combination of Fiserv and First Data also has a B2B component, given First Data's partnership with Mastercard to allow business owners to make immediate disbursements.

All of these companies are competing with fintechs and other startups like Troovo, which contend they can use emerging technology such as cloud hosting and robotics for faster deployment that requires less work on behalf of merchants.

And the proliferation of the gig economy, which has less traditional payroll structures, creates a greater need for business payment automation.

“B2B is a big point for TSYS and Global Payments, which are active in the commercial card space, and those markets are growing like gangbusters,” said Gilles Ubaghs, a senior analyst at Aite Group. “There is a shift in how businesses want to pay and the businesses are struggling with that.”

By providing B2B automation for both banks and businesses, the merging payment processors are feeding a goal of being a single location for diverse payment channels and more complex payment types. But the original building blocks are still there, Ubaghs said, adding larger companies will still face challenges in upgrading as they scale from the mergers.

“While all of this modernization is going on, the old tech rails are still there, and the fragmentation of the technology landscape is still there,” Ubaghs said.