SAP, Visa Connect to Encourage Automated Business Payments

Visa will leverage SAP's hosted transaction technology to encourage more automated corporate payments, which are still more paper-based compared to consumer payments.

The card network's connection to the SAP Financial Services Network is designed to allow corporate clients of participating Visa Commercial issuers to route payment instructions to Visa via the SAP Financial Services Network.

The link is designed to combat the headwinds that hinder corporate payments automation, such as the different data formats that connect financial institutions to their corporate clients, says Sanjay Chikarmane, senior vice president for information management and financial services network business for SAP.

"A large corporate may do business with 80 to 100 financial institutions, each requiring different data formats," he says.

The SAP Financial Services Network connects financial institutions and other companies on an SAP-hosted and managed system. Visa aims to use the network to automate invoice delivery, payments and processing without requiring substantial technology upgrades or locally-installed software to manage the connection to the varied third-party accounting and data systems.

SAP has about 200,000 clients, and is able to leverage its existing connection to these clients to facilitate a single-point of contact to route corporate payments, Chikarmane says. SAP can also help keep information about business and corporates up to date, he says.

"It's hard to keep information about the banks and payees current and in sync," he says. The network's other corporate payment clients include Citigroup, RBS, HSBC, Standard Chartered Bank, JPMorgan Chase and Bank of Tokyo Mitsubishi.

Visa estimates global commercial expenses are about $112 trillion yearly, but half of the corresponding payments are still made by check.  CEB TowerGroup also estimates about half of corporate payments are paper-based.

Visa is one of several companies seeking to automate business payments. NVoicePay is also using hosted software to introduce business payments technology to a segment that is accustomed to using paper to navigate the diverse accounting systems used by business suppliers.

Among other providers, Bill.com integrates a dashboard-style command center into business banking systems; while BillTrust has added a number of new management features to its automated invoice system.

Core banking technology vendor Fiserv has said its large client base will position it well to quickly deploy new business payments technology. And RBS Citizens has upgraded its business payments technology to add more mobile elements, which it says will appeal to younger users and business executives who move around as part of their jobs.