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The technology available for processing financial transactions has grown rapidly over the past decade.  This wind of change is gaining momentum in financial technology (FinTech ), with real potential of changing how, when and where payments are made…and who facilitates them.  It’s important to understand the effects of this important technological innovation and the opportunities it creates for today’s business. It’s good knowledge to have in determining which FinTech solutions can work best for your organization.

What is FinTech?

The term FinTech has been evolving over the years. Originally, it referred to any technology introduced in back-office operations for consumer and financial trade institutions. Basically, it referred to whatever system and service people used to transact their financial business. The internet revolution drove explosive growth for financial technology, offering a much wider variation of “end-to-end” processing over the internet now available for both consumer and commercial finance.

Initially, the technology focused on the consumer market with internet banking. The convenience of doing everything from paying bills online to depositing checks via smart phones gained rapid acceptance of this technology. It’s been reported that today’s millennials would rather go to the dentist than visit their bank!

Addressing the business side of delivering financial services presented more of a challenge, however, with new technologies now available in the commercial space obstacles are disappearing quickly. As a result, adoption of more efficient means for companies to transact their financial business has become a top priority in 2017.

Procure-to-Pay Technology

Since the early 1990s, there have been systems that boasted procure-to-pay technology. Unfortunately, these solutions automated the procurement side of business, but only up until the approval of the invoice. After that, the business needed to find tools to produce the payment itself.

Today, there are true procure-to-pay systems that can be called “procure-to-paid” to differentiate them from earlier attempts at automation. Vendors are now offering systems that track supplier information, capture incoming invoices, match invoices to purchase orders and packing slips, obtain internal approvals, and produce payments to complete the cycle. 

Completely Automated Payment Technology

Traditionally, U. S. businesses have been tied to the concept of paying through limited electronic means, with most payments still tied to producing paper checks. Today, a new innovation in payment automation is being used that can make all of a business’s payments electronically. This trend allows for producing electronic payments for all of a company’s suppliers.


Bitcoin is a virtual banking currency used on the internet. It’s been available for a number of years for consumer payments. Today, it’s gaining ground in B2B payments.

The system is called peer-to-peer networking, where transactions take place between users directly, without requiring any intermediary. The bitcoin is a simple data file that contains “blockchains.” The blockchain has an identifying address, and a ledger that stores the history of who bought and sold the coin. A third component is the private key header log that uses a signature unique to the user to confirm transactions. Since the system works without a central repository or single administrator, bitcoin is called the first decentralized digital currency.
Bitcoins are held online in each user’s “wallet.” The value of bitcoins fluctuates daily.

The advantages to using Bitcoins include:

  • Lower processing fees than credit cards
  • Payments take a fraction of the time required for credit card payments.
  • Bitcoins can be used world-wide

The disadvantages include:

  • No real regulation
  • Lack of stability
  • Fluctuations in value cause problems with completing tax returns, calculating profitability, etc.

Credit Cards

Credit Cards or Purchasing Cards (P-Card) use has risen significantly as both private and public sector organizations have sought to reduce the friction they have in making vendor purchases. A form of company charge card, P-cards allow goods and services to be procured without using traditional AP approval and security processes. Of course, there are guidelines and limits for the use of the card, but they are not in the company’s direct control and reliant upon the employees and merchants who receive payments.

Virtual Cards

Designed as a more secure alternative to ACH, check payments and physical cards, virtual cards are essentially “card-less” credit card payments. A virtual card or V-Card is a unique 16-digit computer generated number used to settle a specific vendor payment transaction issued for a specific dollar amount.  Virtual card numbers are randomly created for a one-time transaction and specific amount, so no trail to a physical credit card and number exists.

Unlike checks and ACH payments, with virtual payment cards, suppliers no longer have to share or expose their bank account information. This presents an even stronger benefit in using virtual cards, as information tying back to your bank account is never exposed.   

Virtual Card Benefits

  • Set accurate controls for when, how and where payments are authorized
  • Control timing of payments to optimize your cash flow
  • Virtually eliminate fraud risk – over check, ACH and physical cards
  • Potential to generate revenue by earning rebates for your AP spend

Final Thoughts

If you’re looking for an electronic B2B payment solution, the experts at ACOM can help. We help our clients transition to 100 percent paperless disbursements, with one Intelligent Payment Hub to manage all of their supplier payments. In addition, we manage the entire vendor ePayment transition process.  Call us at 800-347-3638, or contact us online for more information.