Visa is addressing supplier challenges in B2B payments by introducing their new AR Manager, an automation tool aimed at easing the process of virtual card acceptance for suppliers. Suppliers have often encountered burdens with virtual cards due to the manual processes of reconciliation. The AR Manager seeks to alleviate these hassles by automating the accounts receivable tasks and providing a streamlined experience for both suppliers and buyers. This development forms part of a broader attempt to enhance the efficiency and effectiveness of virtual card usage in business transactions.
Historically, the adoption of virtual cards in B2B payments has been met with both enthusiasm and skepticism. Buyers benefit from added security and improved control, whereas suppliers often find the manual reconciliation processes time-consuming and cumbersome. The introduction of AR Manager is Visa’s response to these long-standing challenges, and it marks a significant step in addressing the supplier-side friction that has slowed widespread virtual card acceptance.
What Challenges Do Suppliers Face?
Supplier-side issues primarily stem from the time and resources required to manually process and reconcile virtual card payments. Visa’s estimates suggest that reconciling a single transaction could take several minutes, which accumulates significant operational costs over multiple transactions. Abhishek from Visa explains that this manual effort constitutes a notable pain point for suppliers.
How Does Visa AR Manager Aim to Help?
Visa’s AR Manager addresses these challenges by automating the key elements of the accounts receivable process. This involves transforming manual processes into a seamless, automated workflow that minimizes errors and reduces the time involved in payment reconciliation. Visa has built this system to be compatible with existing infrastructure, requiring no additional development work from financial institutions, simplifying the adoption process for suppliers and enabling quicker implementation.
The AR Manager emerged from an 18-month development phase, during which Visa conducted pilot tests to refine and expand its capabilities. This includes shifting from email-based automation to a more robust batch file-based and eventually API-based system. Visa’s continuous improvements underscore their commitment to solving the diverse format challenges suppliers face, as noted by Abhishek, who highlighted the myriad of transaction formats encountered by Visa.
Beyond simplifying processes, AR Manager has implications for improving suppliers’ cash flow and operational efficiency. By automatically processing payments upon receipt, suppliers can shorten their days sales outstanding (DSO), thereby enhancing liquidity. This enhanced cash flow and efficiency are crucial for businesses looking to maintain steady operations amidst complex payment ecosystems.
Visa AR Manager’s potential to reshape virtual card acceptance lies in its ability to standardize processes across diverse stakeholders, thereby resolving long-standing bottlenecks in supplier payment systems. By reducing friction, Visa not only improves the supplier experience but aims to drive greater adoption of virtual cards as a preferred payment method in B2B transactions.
