Want AP automation to pay both businesses and consumers?

More businesses are looking to shift from check to digital accounts payable (A/P) payments. Digital payments can reduce A/P costs and customer service call volume related to checks, as well as provide payees with an improved, faster experience.
 
As you automate, you want to keep A/P payment processing easy, convenient and uncomplicated. But is that possible if your A/P operation must pay both vendors and consumers?
 
It is if your organization takes advantage of capabilities now available through bank A/P automation. In fact, by leveraging the right combination of solutions, your organization can send consolidated instructions to its bank for both business and consumer payments, give all payees a choice of how they will be paid, and leave the rest to the bank, including the responsibility for securing payee account information.
 
A wide range of businesses have business-to-consumer (B2C) payments to make in addition to their business-to-business (B2B) vendor payables. Healthcare companies issue patient refunds, for instance. Insurers pay claims. Government agencies make disability payments. Many businesses make frequent payments to small contractors. If your organization has both B2C and B2B payment needs like these, to improve your digital payments experience, ask your banks about the following A/P automation features and capabilities.

Integration flexibility

Many leading banks are beginning to deliver both B2C and B2B payment automation capabilities with a single integration to the bank, says Anu Somani, Head of Payments, U.S. Bank Treasury and Payment Solutions. “Emerging payment automation solutions can offer integration through a single file that combines both B2C and B2B payments, or through a series of API [application programming interface] calls,” she explains.

An ideal A/P solution will offer integration flexibility. A business payer should be able to provide its bank a consolidated B2B and B2C payment instruction file, send separate files if that’s easier, or execute the integration using a type of API known as an “ERP connector.”

An organization’s choice of either file-based or API integration will often depend upon its ERP system, according to Somani. “ERP connectors offer more of a plug-and-play integration, but a given A/P automation solution may not have a connector available for the ERP system the organization uses,” she says.

A modern digital experience with payment choice

An organization that regularly pays both businesses and consumers can burnish its brand by offering its consumer payees the type of convenient modern digital payment experience they have come to expect.
 
For starters, the ideal solution for such an organization offers consumers a choice of how they will receive their payments. The solution will allow consumer payees to access a payment portal and select from convenient electronic payment methods including Automated Clearing House (ACH), Zelle^®, FedNow^® Service, RTP^® and push to debit card, as well as traditional payment methods like checks and prepaid cards.

Additionally, an ideal AP automation solution will offer an organization’s vendors a set of choices more geared to businesses, including methods such as virtual card.

Simple enrollment and rapid payment

The process should be simple for consumer payees. They should be able to just log into a secure payment portal with your company’s branding, choose a payment method, and quickly receive payment — in some cases, instantly. Organizations can strengthen brand loyalty by mirroring the convenience that consumers have come to expect from the direct digital transactions they are doing with friends and family, so-called “peer-to-peer” payments.
 
To ensure a continually positive digital payment experience, the solution should enable consumers to return to the portal at their convenience to change their method-of-payment preference.
 
When it comes to enrolling vendors to accept digital payments, a growing number of banks can provide the heavy lifting there as well, including gathering payee payment preferences and storing that information for you.

Streamlined account verification

Validating the accuracy of consumer information is paramount. A premium payment automation solution will offer the payer account verification using APIs.

APIs can expedite this process by acting as digital messengers. For example, they can relay that a consumer who selects the Zelle payment option and provides a phone number or email address is registered with the Zelle Network. Similarly, APIs can be used to verify that the banking information a business or a consumer provided to accept an ACH, RTP, or FedNow payment is accurate, and the designated account is active. This not only will reduce returns but acts as a significant way to mitigate the risk of business email compromise fraud.

Secure storage of payee account information

In adopting a combined AP automation solution that includes both B2B and B2C payment capabilities, an organization also needs to secure payee banking information to protect against data breaches and potential reputational risk. An effective way to do that is to opt for a bank solution with an API that will securely store and tokenize that information to keep it hidden from fraudsters.

If your organization regularly makes payments to both businesses and consumers and you want to learn how A/P automation can simplify the process, contact a U.S. Bank Treasury and Payments Solutions consultant.