Getting on Board: How Supplier Enablement Is Unlocking the Benefits of Virtual Cards

Historically, B2B payments have often played out like a tug-of-war, with buyers aiming to retain their cash as long as possible while suppliers seek prompt payment.

As a result, innovations that benefit both sides are often viewed through the lens of competing interests. Virtual cards, for example, offer a compelling solution for accounts payable (AP) teams. With features like enhanced security, improved spend management, and the ability to earn supplier rebates and discounts, virtual cards enable buyers to streamline AP processes and boost profitability. At the same time, these tools deliver advantages to suppliers’ accounts receivable (AR) teams, such as faster payments and improved cash flow.

Despite these benefits, some suppliers remain hesitant to embrace virtual card payments. Concerns may stem from a reluctance to adopt buyer-driven innovations or a lack of the necessary technical infrastructure to process these cards, creating challenges for AR teams. However, most onboarding obstacles can be overcome by partnering with a payment provider experienced in supplier enablement — the process of helping suppliers onboard new payment platforms. By closing this gap, buyers and suppliers can fully realize the benefits that virtual cards bring to B2B transactions.

• Virtual Cards Optimize Payments
• Getting Suppliers on Board: Overcoming Reluctance
• Building a Bridge: Supplier Enablement
• Enabling the Transition to Virtual Card Acceptance

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Virtual Cards Optimize Payments

When it comes to cash flow, security and convenience, virtual cards offer AP and AR departments a powerful suite of advantages.

Nearly 9 in 10 firms are adopting or pursuing virtual cards for making business payments.

According to a survey of financial leaders, 88% of respondents are either leveraging or contemplating the use of virtual cards, with 48% actively using them. These cards fulfill a range of B2B applications, from supplier payments to employee expenses to purchases of services, technology, equipment and software. As a result, adopters anticipate increasing the cards’ usage as a percentage of all payments from 45% to 57% in the next 12 months.

88%

of firms are actively using or considering the use of virtual cards.

For AP departments, virtual cards offer advantages over traditional payment types. They can be restricted to specific dollar amounts or merchants to prevent overspending and unauthorized use. Also, they are harder to defraud, as they generate unique card numbers at the point of sale that prevent their reuse. In addition, they eliminate the need for currency conversions and have lower transaction fees, making them useful for cross-border purchases.

Virtual cards integrate smoothly into the payables process.

For payables, virtual card implementation is straightforward. One example is the Conferma and WEX virtual card solution being offered through the Concur Invoice system. When a business receives an invoice from a supplier, the system generates a virtual card for a specific amount, providing preauthorized payment details for processing and automatically reconciling the virtual payment against the invoice. This makes payments faster and more secure, eliminating the need for manually tracking receipts and invoices. It also avoids cross-border payment fees and earns rebate revenue, according to WEX.

Similarly, for suppliers, virtual cards mark a positive shift away from traditional payment methods, offering faster payment processing and simplified invoice reconciliation. However, obstacles remain to bringing suppliers into the fold for acceptance of these payments.
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Getting Suppliers on Board: Overcoming Reluctance

Virtual cards may pose adoption challenges for suppliers. To realize the full benefits for both parties, buyers will need to help overcome these challenges.

Suppliers encounter frequent challenges in onboarding new payment portals.

50%

of suppliers say onboarding a new payment portal is a top pain point.

Supplier onboarding for business payments can often stretch over several months. One of suppliers’ most frequent payment challenges reported in a survey was registering on a new customer’s supplier portal, cited by 50%. This surpassed the pain point of lost or delayed checks (34%). Difficulties with onboarding may include such obstacles as complex systems, barriers to data sharing, misaligned communication processes and challenges in integrating portals within existing enterprise resource planning (ERP) systems.

At the same time, however, suppliers reported late payments as their biggest pain point of all, with more than 70% saying payment delays impede their business operations. To solve for this challenge, suppliers also named their top three preferred payment attributes: reliability, instant or near-instant speed, and straight-through processing to their bank accounts. Virtual cards check all three boxes on suppliers’ wish lists.

Virtual cards could relieve suppliers’ biggest headache: late payments.

Although many suppliers are still new to the concept of virtual cards, learning more about the cards’ advantages could win them over. Speedy payment is a boon for AR departments, and legacy payments such as checks and wire transfers can take weeks to clear. Traditional methods also necessitate manual effort to match payments with their corresponding invoices, especially if remittance details are unclear or inconsistent. Virtual cards embed invoice-specific details into each transaction, allowing suppliers to receive secure payments directly linked to their invoices. This faster access to funds means suppliers can reinvest in inventory, equipment or growth initiatives without incurring costly debt.

Education and collaboration are the keys to unlocking virtual cards’ benefits for suppliers. Buyers can play a role in guiding their B2B partners toward this end by enlisting the support of a payment provider proficient in the process of supplier enablement.
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Building a Bridge: Supplier Enablement

Payment providers skilled in supplier enablement can help surmount virtual card obstacles through onboarding, education and seamless integration with buyers’ systems.

Buyers are aware of virtual cards, but they may not know about options for enabling them.

In a survey, 92% of midmarket finance teams said improving their AP efficiency is a top priority this year, and 94% were aware of virtual card solutions. However, 71% continue to pay their suppliers with checks, despite the inefficiencies associated with these legacy payments. More than one-third (34%) of buyers said they continue to use checks because their suppliers either prefer this form of payment or will accept no other. Moreover, 14% of finance teams are concerned that virtual card implementation would be overly time-consuming or complex.

94%

of finance teams are aware of virtual cards.

These apprehensions suggest buyers may not be aware of the availability of robust supplier enablement programs aimed at smoothing the transition to electronic payments.

Supplier enablement can lower the barriers to virtual card adoption.

While suppliers frequently have legitimate reservations about accepting virtual cards, these hurdles can often be overcome with the help of experienced payment providers that have supplier enablement capabilities for these cards. These providers work closely with suppliers to address their concerns and help unpack the cards’ benefits, such as faster processing, reduced fraud risk and simplified reconciliation.

The process of supplier enablement involves several key steps. It begins with an analysis of the pool of suppliers to identify those that already accept or are most likely to accept virtual cards. It follows with outreach and communication to educate suppliers and encourage adoption. A skilled enablement provider can then help with the actual integration within existing ERP or accounting systems to ensure a smooth transition for suppliers. Finally, continuous support offers ongoing analysis to optimize supplier enablement and assist with future enrollment as the business grows.
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Enabling the Transition to Virtual Card Acceptance

Although buyers have historically led the way in virtual card adoption, future growth will depend on actively engaging and onboarding suppliers. Overcoming any supplier hesitancy to accept these payments hinges on supplier enablement. Through such initiatives, payment specialists can provide targeted education and hands-on support, helping suppliers understand the benefits of virtual cards for their businesses, including prompt and guaranteed payments, improved cash flow and streamlined reconciliation. By demonstrating how these cards can eliminate the late payments that hamper operations, payment specialists can make transitioning to the cards more compelling and less daunting.

Furthermore, supplier enablement teams can facilitate the actual integration of virtual card payments into suppliers’ existing systems. This support not only addresses technical challenges but also builds trust and fosters collaboration between buyers and suppliers. Ultimately, using payment specialists’ expertise ensures that both partners can unlock the full potential of virtual card solutions, creating a more efficient and mutually beneficial B2B payment ecosystem.

We’re in an uncertain economic climate. The spend analysis and control that comes from using virtual cards are critical tools to managing cash flow. Plus, small- to mid-sized suppliers tell us they are grateful they will be paid quickly and securely when they accept virtual cards for payment.”

Eric Frankovic
President of Corporate Payments, WEX

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