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What is a business payments network?

Billtrust defines a business payments network as a business-to-business payments platform that automates financial transactions between buyers and suppliers. Business payments networks focus on electronic payments which include ACH, wire and credit card payments.

Business payments networks exist because the current B2B payments ecosystem is full of inefficiencies. Paper checks are still the dominant form of B2B payment, even though they are subject to manual processing and delayed transit time via the mail system. Electronic payments are growing in use, but they face several challenges.

Challenge to electronic payments: decoupled remittance

ACH payments and wire transfers are fast, low-cost forms of electronic payment. But they pose a major problem to accounts receivable teams. When an ACH or wire transfer is transmitted to a supplier, it does not come with enough information about the transaction to reconcile the payment and enable cash application. 

In order to apply the received funds, the supplier’s AR team needs remittance data that indicates who is making the payment and what invoice(s) the funds are meant to pay off. 

This remittance data is often transmitted separately, either in an email or a web portal. In order to retrieve the data and apply the cash, an AR professional must retrieve the remittance data manually, slowing the process and taking up resources. 

How do business payments networks gather remittance?

ACH and wire transfer payments are often transmitted without remittance data. It is then up to the buyer to send remittance data about the payment to the supplier separately. This data is commonly sent through email or web portal.

Billtrust’s Business Payments Network uses intelligent automation to retrieve remittance data from emails and web portals, standardize and consolidate it and transmit it to a supplier’s system of record. 

From there, the supplier can utilize the easily accessible remittance data to accurately apply the funds received to open invoices – quickly realizing cash flow for the business. 

Challenge to electronic payments: interchange fees

Credit card payments generally come with remittance data attached, avoiding one of the challenges of electronic payments. But they also come with interchange fees which can be difficult to control and cut into the supplier’s margins. 

Many businesses feel pressured to accept credit card payments because that is their buyers preferred form of payment, but they have difficulty controlling the fees. 

How can Billtrust’s Business Payments Network lower credit card fees?

Billtrust’s Business Payment Network can help lower the interchange fees that suppliers must pay to accept electronic payments. It does this by processing credit card payments with higher levels of data.

Credit card processing is categorized by three levels of data: 1, 2 and 3. Each level describes a certain amount of information about the payment. Level 1 includes the least information and Level 3 the most. 

Card transactions submitted with Level 2 and Level 3 information can command lower interchange rates because credit card issuers have more confidence in the transaction being legitimate. But it can be challenging for many businesses to submit Level 2 and Level 3 data with each transaction. 

Billtrust’s Business Payments Network can help businesses process their transactions with higher levels of data, lowering their interchange fees. 

Learning more about business payments networks

Businesses payments networks are a new technology and may be referred to as business payments services or business payments solutions. If you would like to learn more about Billtrust’s Business Payments Network, developed in collaboration with Visa, please click here or reach out to [email protected].

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