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Visa Inc. is hoping to get off to a quick start in supply-chain management by launching a business-to-business payments network with one of the most venerable players in the field, U.S. Bancorp, reports CardLine Global sister publication American Banker. Visa said Wednesday it formed a joint venture with U.S. Bancorp's U.S. Bank to handle payments between corporations and government agencies (CardLine Global, 30 July). The venture, Syncada LLC, will face stiff competition for similar services from some of the industry's biggest names, but observers say combining Visa's connections to banks all over the world and U.S. Bank's experience handling domestic corporate payments could help the new entrant succeed. "We're aspiring to create the gold standard in global B2B payments," says Robert T. Abele, president of U.S. Bank's corporate payment systems unit. "There's a tremendous opportunity to create efficiency, drive automation and lower the cost of doing business for companies and governments." Syncada would be "the first global supply-chain network that focuses on payment processing, electronic invoicing and trade finance," says Darren Parslow, Visa head of global commercial products. The centerpiece asset of Syncada is U.S. Bank's PowerTrack system, an electronic-invoicing, payment and trade-finance network that processed its first transaction in 1998, for the U.S. Defense Department. Today, the network serves hundreds of corporate and governmental buyers, interacts with thousands of suppliers and processed more than US$18 billion (12.6 billion euros) in invoices in 2008, Abele says. B2B payments networks have become increasingly common in recent years, and the concept caught on in a big way in 2007 when American Express Co., JPMorgan Chase & Co. and MasterCard Worldwide each rolled out services that year. Still, the corporate world has remained firmly tied to nonelectronic processes. Though U.S. Bank has accumulated a lengthy list of Fortune 1,000 clients over the past decade, "we're challenged as a domestic bank" to extend those services around the world, Abele says. "We're not on the ground in Asia," but Visa's presence there would enable a U.S. corporate buyer to automate its connections to suppliers around the Pacific Rim.
