Visa introduces next generation B2B payment service

[April 10th 2002]

Visa U.S.A. has introduced a new non-card based electronic payment and information management service designed to help eliminate the use of paper checks in the $11.5 trillion business-to-business (B2B) marketplace.

The new service called Visa Commerce has the potential to save companies billions of dollars annually by greatly simplifying the procurement process.

The Internet has given rise to numerous online procurement systems that increase operating efficiencies, yet many companies continue to make payments using inefficient and costly paper checks. According to research conducted by the Gartner Group and Visa, 86% of all B2B payments are currently made using paper checks, while only 11% of companies find checks or cash to be an efficient form of payment.

"Visa Commerce is the `missing link' that adds electronic payment and information management to the procurement process," said Rob Stansfield, executive vice president of commercial solutions at Visa U.S.A. "By filling this void, Visa Commerce will help make true B2B e-commerce a reality."

Visa Commerce complements Visa's traditional purchasing card program as an electronic solution that gives buyers and suppliers new levels of control and flexibility when making or receiving B2B payments. Visa's long-standing position as the industry leader in purchasing cards has been further solidified by continued growth in purchase volume, which has nearly tripled between 1997 and 2001. This leadership position is reflected in the development of Visa Commerce and underscores the company's commitment to offer the broadest array of secure payment alternatives to businesses.

Visa Commerce represents an entirely new model in commercial payment. It allows the buyer to determine when to initiate electronic payment, defer settlement of the payment based on pre-established terms with suppliers and transact the type of B2B payments needed in today's procurement environment in any amounts up to $10 million per transaction.

Importantly, Visa Commerce does not replace procurement software services, enterprise resource planning (ERP) systems, or other payment products like Visa Purchasing cards. While Visa Commerce helps companies more fully realize their investment in e-procurement systems, it also provides greater payment efficiency to companies with non-electronic procurement systems by reducing the overall use of paper checks as a form of payment. It also provides companies with global payment capability not possible with automated clearing house (ACH) transactions.

By seamlessly integrating into existing procurement systems, Visa Commerce can bring electronic payment and information management capability to companies of all sizes. For example, it can help bring cost savings and efficiencies to a computer hardware manufacturer for making volume purchases with their circuit board supplier or a national hotel chain that makes regular high volume purchases of linen or cleaning supplies.

Visa Commerce provides direct cost savings by eliminating several expensive, paper-based steps in the payment and reconciliation processes, such as sending payment requests and paying by check. What's more, buyers receive enhanced transaction information, the ability to receive electronic payment requests from suppliers and other cash management services that can be customized by their financial institution. For suppliers, Visa Commerce allows online payment requests, immediate access to the status of payments online, acceptance of electronic payments, easier transaction reconciliation and enhanced transaction information. Additionally, Visa Member financial institutions have a high degree of flexibility to brand and differentiate their Visa Commerce service offerings in the marketplace to meet individual client needs.

Visa Commerce is comprised of three major components -- a Member-branded payment account, an optional web-based user interface that simplifies the payment process and a secure technology platform supported by VisaNet, the world's most reliable, secure electronic payment network. Visa Commerce harnesses the power of VisaNet and easily connects this global, open network with a company's existing procurement system.

"Unlike many would-be B2B payment providers, Visa already has a proven, reliable payment infrastructure and decades of experience in the electronic payments business," added Stansfield." To date, no other providers have successfully created a payment system that can serve as a global standard. Visa has the global technology infrastructure and unparalleled core competencies in the payments business to be the standard setter in this category."

Visa Member financial institutions are expected to begin piloting Visa Commerce in the coming months with general release of the service expected for 2003.

Links
Visa U.S.A.		http://www.visa.com