What Bank of America is Building on Bill.com's Technology

Bank of America Merrill Lynch is developing a product called CashPro BillPay, which combines the bank's CashPro Online treasury management product with Bill.com's payments technology.

B of A is piloting CashPro BillPay with a limited group of clients and will expand the product's availability on a state-by-state basis. It expects the product to be available nationwide by the end of 2015.

"This segment has been challenged with automating their payables process, in moving from paper to electronic," says Cindy Murray, head of global treasury product platforms and electronic channels for Bank of America Merrill Lynch.

The service will carry the bank's brand. Bill.com's technology is designed for small and mid-sized businesses and tasks such as payments execution, expense reporting and document digitation. Bank of America holds a stake in Bill.com, which is currently focused on building its user base by using banks as resellers.

CashPro BillPay will enable businesses to upload invoices, rout them through the business for approvals, and schedule electronic and paper payments. B of A will also support check production and a document repository for past invoices, monthly bills and related contracts. The product additionally includes an integrated fraud management program for paper checks.

To automate business payment processing, the system needs enough information to create electronic payments, Murray says. Bank of America plans to provide access to a vendor database to support the conversion from paper to electronic. 

"Our goal is to have the majority of the payments go out electronically versus a check," she says. "But if there aren’t e-payment instructions for certain suppliers, the check can be an alternative."

The vendor database will grow over time as businesses add suppliers. This will allow more payments to be automated, Murray says.

B of A will not use Bill.com's "command center," which allows businesses to view a roster of payments on a dashboard. The bank will instead develop its own dashboard that it will integrate into the payment function, Murray says.

CashPro BillPay will support QuickBooks and other Web-based accounting programs. The bank will also enable clients to load invoice information or provide scanned documents which can be added to a digital payment file, Murray says.

B of A did not say what percentage of its business clients still favor paper checks, though the percentage is high across the industry. Nearly half of all non-government checks written in the U.S. come from small businesses, according to Nacha, the association that manages the Automated Clearing House electronic payment network. The problem is often blamed on inertia—business are accustomed to paying by check—and communication problems.

Payment companies are trying to bridge that automation gap. BillTrust, for example, recently introduced a new invoice automation product; Fiserv is targeting the small-business market with a simplified user interface; and Nacha this week introduced a voluntary program designed to automate exceptions.