Card Processors continue to Partner with P2P vendors – Visa Latest


In payments, someone has to enable the vendor to receive that payment.   In the days of cheques, it was and still is easy.  All you need to know is your supplier or vendor’s address.  In the days of ePayments, you have to collect information from the supplier in terms of:

  • What kind of payment they accept,
  • How they want to accept them
  • Who the contact point is,
  • If accepting ACH, the account number and routing number
  • If accepting Wire, the bank routing instructions, etc.
  • If accepting Card, bank account details and remittance information.

This information has to be maintained, managed, and updated when changed.  Imagine a vendor changing collection accounts, only to have to instruct their 500 buyers of their new bank details.  So it’s no wonder there has been tremendous partnering in this space.

Previously, we had two of the major credit card companies aligned with P2P vendors –1/ SAP/Ariba and Discover and 2/ Basware with Mastercard

Now we have a third – Bottomline Technologies and Visa.  Out of the three card ventures, two require bank involvement (Bottomline & Visa and BaswarePay) while AribaPay is a module of the Ariba suite.

The New Partnership on the Block

Bottomline Technologies (via Paymode-X product) and Visa

Visa’s commercial card solution, Visa Payables, and Bottomline’s payment network, Paymode-X, joined to create Paymode-X with Visa Payables.  This is not Visa’s first foray into the B2B space, having done a joint venture with U.S. Bank years ago, taking US Bank’s freight automation platform called Powertrack and forming a joint venture, Syncada. The old Powertrack, now part of US Banks Corporate Payment division, provides an outsourcing platform to large corporations to manage freight payables.   In 2012, Syncada processed more than USD $21 billion in payments and millions of invoices and trade documents, so it was not and is not a trivial business. The lion’s share of this business was freight payables, and continues to be supported by two main banks – U.S. Bank and Citibank.

Visa decided to divest 2014. We broke the story here

Like Syncada, the Paymode core value proposition is a network effect.  Paymode-X facilitates electronic payments and remittance advices between payers and vendors.  Banks believe providing access to Paymode-X will enhance their support for clients converting from paper checks to electronic payments. Paymode is a check to ACH Platform - $157bn in payments via ACH.

Paymode-X does the following to a Buyer’s supplier ecosystem:

  1. Paymode does a crossover analysis for corporates and says give us your AP spend file and we will analyze it and see how many of the suppliers are already in our network. They are one of the world’s largest business-to-business payment networks with more than 300,000 members, so believe a cross over analysis is a powerful tool to sign up buyers by saying we already have 15% or 25% of your suppliers on the system.
  2. Negotiates discount rate supplier would pay buyer

It’s voluntary to their suppliers – fee charged by Paymode-X is equivalent to interchange with pcards.  Paymodes pitch to bank is to be a substitute for those banks without a strong Pcard product line.

I am conducting some market intelligence on the product gaps banks are attempting to fill in their payable, receivable, and supply chain finance offerings to multiple customer segments (large, middle market, small).  Paymode-X is just one of many areas banks are investing.

If you are a financial institution and interested in learning how you can be involved, please contact me at dgustin (at)

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Voices (2)

  1. Maxim Rokhline:

    Hi David –
    the consistent issue with p-card solutions (however they are enabled) is the dependency on the bank issuer. Say, you are a big enterprise and now want to introduce single use virtual card as a from of payment (say you are on a Basware platform) you should either be lucky and have your bank already participating in Mastercard (in-control) virtual card program or convince your card issuing bank to participate in the program or change your bank issuer. Obviously to convince a bank (to participate) or to change a bank is a churn. This is just one structural (and technical) issue with the currently available virtual card solutions offered by networks (or issuers on their own).

    Thank you,

    1. David Gustin:

      Hi Maxim

      Great point. Bottom line, the payment must still go through the Card payment network, which means a company’s supplier must be onboarded to the program as well as the point you raise above.

      That is the challenge in payment card systems in general, the system by its design has to feed a lot of mouths and every one wants their cut, card processors, software providers earning fees on gateways, card acquirers, issuing banks, and of course the brands (Visa, Mastercard) themselves

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