B2B Card Payments Usher in New Era of Supplier Enablement

For years, the use of cards within B2B payments has been relatively nascent.

However, with news Tuesday (Oct. 1) that American Express teamed with Boost Payment Solutions to provide commercial virtual card processing services, buyers and suppliers in the B2B space are increasingly waking up to a new reality. Virtual cards are no longer just a fancy alternative for making payments around travel and entertainment; they’re quickly becoming a cost-effective necessity for key transactions.

At the center of this new era is a renewed approach to supplier enablement aimed at dispelling long-standing myths and misperceptions around card acceptance.

Traditional B2B payment methods, such as wire transfers or checks, can be slow, opaque and difficult to reconcile with internal financial systems. This lack of transparency can result in inefficiencies, missed payments and a greater need for manual intervention.

Against this backdrop, B2B payment processes are evolving rapidly as companies look for faster, more efficient, and financially advantageous ways to manage transactions.

By giving both buyers and suppliers benefits that include extending payment terms, enhancing cash flow visibility, reducing administrative burdens and offering financial incentives, B2B card payments help provide businesses with the tools they need to manage liquidity and remain competitive in a fast-changing market.

However, without buy-in from suppliers, the scalability of cards across the B2B landscape is limited, as these transactions are a two-way street.

Read also: B2B Virtual Cards Move Buyer-Supplier Relationships From Manual to Meaningful

With a mix of efficiency, security and flexibility, virtual cards have the potential to offer more value than traditional payment methods. For businesses looking to tighten their payment processes, the numbers add up around accepting them.

“It’s always been rather clear why buyers would want to use virtual cards, but the same isn’t true for suppliers,” Robin Boudsocq, head of B2B Commercial Cards at Citi, told PYMNTS in April.

For buyers, virtual card benefits include working capital optimization, chargeback protection and enhanced data for reconciliation and fraud prevention.

The perception of suppliers, on the other hand, is often that virtual card payments for B2B transactions are expensive and not advantageous, he said.

“Thousands of buyers have said that they love virtual cards, and yet very few suppliers are willing to accept them despite the fact that they are really good products,” Paul Christensen, CEO of B2B payments accelerator Previse,  told PYMNTS in June. “It’s obvious to see where the system is failing. It’s supplier acceptance.”

However, by embracing card payments, suppliers unlock working capital benefits — ranging from faster payment cycles to reduced payment risk — while enhancing their competitive positioning in the digital economy.

See also: Commercial Cards in Action: Businesses Gain Working Capital Flexibility

The PYMNTS Intelligence report “Optimizing AR to Mitigate Uncertainty for Middle-Market Businesses” found that firms not using virtual cards experience an average revenue loss of 4.6% from payment uncertainties. (Larger, more financially robust firms report a lower impact.)

“The companies that aren’t embracing virtual cards or B2B payments innovations will be the ones that fall behind,” ConnexPay founder and CEO Bob Kaufman told PYMNTS in March. “The suppliers that are not as flexible and willing to embrace these new forms of payments are going to lose business, while the buyers who are not using them are losing revenue, which results in them not being as competitive in their space.”

Buyers, particularly those looking to optimize their own working capital, may also prefer to work with suppliers that offer flexible payment options, including card acceptance.

Traditional B2B payment methods, such as checks and bank transfers, can be slow and unpredictable, often taking weeks to process. These delays can create cash flow challenges for suppliers, particularly small– to medium-sized businesses that rely on timely payments to cover operational expenses.

By accepting card payments, suppliers can speed up the payment process. While buyers typically have a 30- to 60-day grace period before settling their card bill with the issuer, the supplier gets paid faster — often within a few days of the transaction. This quicker access to money provides suppliers with greater liquidity and reduces the risk of late payments or bad debt, making it easier to manage day-to-day operations and meet their financial obligations.

With card payments, suppliers have real-time tracking and more predictable payment cycles. This enhanced visibility allows them to make more informed decisions about how to allocate working capital, whether it’s used to cover immediate expenses, reinvest in the business or pursue strategic initiatives.

Many card payment platforms integrate directly with accounting software, streamlining the reconciliation process and reducing the time and effort spent managing accounts receivable.

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