Evolving Payments: From Making Payments Globally to Virtual Cards

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Advise - Major Projects
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Research - Market Data
Inform - Industry Insights


Tuesday, January 31, 2023


11:00 AM – 12:00 PM EST


This is an online event


Mark Penserini, Corpay

Anthony DeBellis, Mastercard

Craig Jeffery, Strategic Treasurer

Sponsored By


Hosted By

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Description: The payments landscape has been evolving more rapidly of late. Handling these changes has been a significant challenge, but newer payment types have also brought new opportunities and benefits. This session will cover the experiences, expectations, and plans of payment and treasury professionals. Companies are adapting in order to better manage payments across a range of geographies and currencies. Meanwhile, the scope and scale of fraud has sped the rise of virtual cards. This session will expand on the results and implications of two payment-related surveys.

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Announcer  00:24

Okay, well welcome everyone to today’s webinar titled, Evolving Payments:  From Making Payments Globally to Virtual Cards. This is Brian from Strategic Treasurer, and we’re pleased you could join us as we consider the results and implications of two payment related surveys. But before I introduce today’s speakers, I have just a few quick announcements. Zoom offers several different ways for us to interact today. If you would like to post comments or questions viewable by all attendees, please use the chat icon in the toolbar. If you’d like to ask your question to just the presenters, please use the q&a icon in the toolbar. You can ask your questions at any time during the presentation and we’ll try to get to as many as we can. But if we don’t get to your question, someone from our team will gladly follow up with you. There will also be a few polling questions throughout today’s webinar, where you’ll be able to select your response from a list of multiple choices. You will need to click the submit button on the polling questions to have your response recorded. If you are here for CPE credits, you will need to answer at least three polls today. And last, please ensure that your Zoom display name includes both your first and last name, so we’ll know to whom we should send the credits. Our speakers for today are Mark Penserini, vice president of partner management at Corpay, nd Anthony Debellis, Director of US B2B solutions at Mastercard, and Craig Jeffery, founder and managing partner of Strategic Treasurer.  Welcome Mark, Anthony, and Craig. And I’ll now turn the presentation over to you.


Craig Jeffery  02:10

Thanks, Brian. And welcome, Anthony and Mark, it’s good to present with you on this topic.


Mark Penserini  02:16

Good to be here.


Anthony DeBellis  02:18

Thank you so much, Craig.


Craig Jeffery  02:20

So yeah, thanks, everyone for joining. We really appreciate you taking time to cover this key topic. It’s we look at how payments are changing over time. And this is really important for people in AP and treasury, even in receivables. So thank you for for joining, thank you for staying engaged in the chat box as well. This is a, this is fun for us to cover these topics. But let’s let’s go over what we’re going to cover today. We’ll begin with about the surveys.  There’s two key surveys that are, our partners on the surveys Mastercard, and Corpay partnered with and so, share, share some information about that, give you an opportunity to download those for free.  Then we’ll look at investments in payment programs, where you’ll see some figures, massive adoption and additional spend, sometimes approximately 50% are spending investing in payments in any given year. But we’ll share some information about how your peers are investing in this space.  Then we’ll look at payment security. We’re all familiar with fraud, um, how dangerous that is, you know, you’ll hear not just that over 80% of your peers indicate, you know, plans to address this concern, alleviate the concern. But we’ll talk about the different perspectives that companies can have on payments security driven from both the survey data and information as well as from practical experience from both Mark and Anthony. Then we’ll look at the value drivers in payment discussions and decisions. As you look at the one side of the equation and the other side of the equation, the payer and the payee, how you how you pay one another, what methods are chosen, how that helps with the business process. As we think about that, from an end to end perspective, that gets us to the different value drivers that may be on the pay side of the payer side. And coming to some kind of common ground where there’s value, that’ll be part of the discussion there. We’ll also spend a bit of time on the payment challenges, payment challenges to adoption and regulation. Regulations that happen. So everything from sanction filtering, to, you know, to fraud, you know, the uptake and the ability to make payments go across the board. Really, really critical items there. And then we’ll move from there to our key takeaways we’ll have key takeaways about recognizing, recognizing seen value and protecting. So some of the themes that you’ll hear us discussing. Each of us will give a key takeaway for you to consider as you take some of these ideas back to your organization. But, with that we’re gonna get right into the survey. So we have the Global Payments Survey, underwritten by Corpay, you can see that on the left side of your screen. And you can also see on the right hand side, you can see the Virtual Card Solutions Survey Report that that Mastercard and Strategic Treasurer partnered on. We’re extremely excited about that both of these. And you’ll see in the chat box, you’ll see links to download those reports pop up shortly.  We’ll have links at the end as well. But that’s where you can click in, download those reports to your device, use them around your company. But we just wanted to point those out. And thank Corpay, and Mastercard for partnering on this research.  We think it’s so important to get current information on key topics across the payment spectrum, you know, for the industry. So, so with that, as we cover that area, we’re going to move into our first section. So we’re going to be talking about investments that, that are used to create efficiency, so streamlining the payment processing. And Mark, I’m gonna ask you to lead us off on some of the areas where we can see some of these payment efficiencies come up. And I guess some of the problems as well as we look at payment delays.


Mark Penserini  06:29

Yeah, thanks, Craig. Yeah, it’s very interesting. Looking at the I mean, we’re talking, talking about global, right, I saw Ghana, Nigeria, and just about every every single country. So it’s pretty exciting when you get to see that and that group of people very interested in this. And I do encourage you to download the surveys. I love the surveys for multiple reasons. One is in for me, a lot of this validates what I hear from customers and potential customers who are looking at some type of automation payments, solutions, streamlining workflows, whatever it happens to be. The other thing is, I find there’s always, oh, I didn’t think about that, or I hadn’t really ran across that yet. So I think the survey does a great job of giving, giving you as an individual a lot of opportunity to, to really do some good research without having to go out and do all the research on your own, you can see it there. I do want to talk a little bit about payment delays. I think one of the things and just thinking about this through through my studies this week, I didn’t realize it but this month is three years that we had the pandemic and boy did that change things, right. So we’ve seen a lot of shifts and changes over that one of those has been in the way vendors want to be paid. And vendors were, I think not so much taking control of the payment methods as they are today seemed like the customer themselves, probably was controlling that payment method, issues around that payment method, where I think vendors are more involved in that now. AP departments are looking to streamline their workflows. That’s that’s been a theme. For the last couple years, I’ve heard it over and over again, when I go to conferences and speak and just talk to individuals, they want more automation. And some of that there’s significant issues around payment delays. This is really where it all starts, right?  Vendors, their vendor relationships are very important to them. So these payment delays really start to impact them. And there are many reasons for those payment delays. And here you see the percentages, nearly all of our payments are on time only about 50%. That means the other 48 basically are are struggling at some way, getting their payments out whether it’s fast growth within your organization and your company, and AP not being able to stay up with that. Document control management is a huge issue within organizations, human error, there’s always human error when when you’re processing invoices. And then it’s just general cash flow management. So these are making up I think, you know, a pretty long list of why these percentages are the way they are today. And it’s still interesting to me that they’re that high. People want to talk about AP automation. AP automation means a lot of different things to a lot of different people. And so we’ll kind of dig into that throughout the day. But you can see we’re still heavily fighting just general payment delays to vendors, which I think is a real struggle for a lot of organizations still today.


Craig Jeffery  09:51

Yeah, thanks, Mark. Anthony, any comments on that before we move on to the next slide, which is yours?


Anthony DeBellis  09:59

Yeah, I mean, just really quick, I think Mark summed it up really well.  I would just say too, that even in organizations where delays are the minority, I think what one read that we took from this data was that it can create an outsized amount of friction, right. And that causes a lot of pain around. I know, we’ll talk about that through survey. But you know, really well said, Mark. Thank you.


Craig Jeffery  10:29



Anthony DeBellis  10:30

And I’ll jump in here and talk a little bit about approval processes and how that impacts, you know, payers ability to control when they initiate a payment. Well, we can see from the data is that out of the respondents from the 2022 Virtual Card Survey, the vast majority 85% of payers have some flexibility on when they can release a payment, either at terms or early, and about 15% do not. And the way we’re reading this 15% value, is that their AP processes are such that they consume all of the time, in the terms in the amount of payment terms that are available, so that once these things are approved, they have to be paid out the door. So you know, just some general thoughts on this is you want, it’s really good that most payments are being able to be made on time, and even with some payment flexibility of being paid earlier. But tying back to Mark’s earlier points, it’s really critical that we focus on, you know, solutions to break through some of that complexity and friction in the AP process. Because I think a lot of what comes through in you know, the the virtual card survey and the global payments survey is that there is just a lot of friction around around these payments. So you know, when we look at the these numbers on they are very encouraging. But then also there’s some deeper, deeper questions to think about is how early, how much flexibility in earliness exists today? How can that get better? And what friction exists? And how can we alleviate that with with new technologies and new solutions? And that’s something you know, here at Mastercard, like, a lot of my focus goes into thinking through what are some of those those ideas, those solutions, those things that can be brought to market?


Craig Jeffery  12:32

Yes, it’s a binary transaction if you can only pay as soon as you approved it. There’s no, there’s no flexibility for earlier payments or, or better forecasts and other information, you limit yourself, and that’s a an element of efficiency. Yeah. Thanks. Thanks, Anthony. And yeah, back to you, Mark. So what are some of the top causes of slow invoice approval?


Mark Penserini  12:57

Yeah, I thought this was very interesting, a few. When you get the survey, you can see this, but when you look at both sides of this, right one is what limits of your organization from approving invoices faster. The other is, please rate these items based on perception or their impact. The percentages are very interesting. So time to take in to approve invoices. And then too many touch points all in that 60% range, right? This goes back to where I think we saw on our site. And again, we’re more on the payment side, right? But when you start to get in with the AP team and talk about a lot of this, this, this is this is the beginning of the flow, right, the very front end of this. And what we see what we saw through the pandemic, is a lot of these manual processes just got really magnified, because now they weren’t able to sit in the same office. So I guess I’m still surprised that these numbers are still this high, even though we’re you know, we’re three years out or three years from the beginning of that, and at least a year out. And then you know, time to properly route invoices, no informed enforcement of timeframes, I mean, they all just kind of flow together here, which just shows that there’s some some real key issues around routing around document tracking, exception handling, multiple staff involvement, these all are just what I call operational efficiencies that take away time from multiple individuals to be able to really be strategic in their thinking and where the areas where they’re spending their time. But the thing that just drew me was how closely these percentages were kind of were kind of tied together. The third one, their workflow management functionality. This goes back to again, the theme that I I’ve been hearing a lot is streamlining workflow, really putting processes in place that eliminate the manual processes that allow an invoice from procure all the way to pay, right that let it flow through and have a lot of the is manual processes taken out of the flow? It’s a it’s an ideal. But I think the other thing that I hear a lot of is, people really need to take the time to understand what is their workflow today? And where are the pain points, right? We see a lot of the pain points right here. I think these are great pain points, they’re going to be different for you, as a, you know, as an organization, but I think, again, the survey will help you if you’re in that, you know, if you’re kind of in that mode of trying to figure out, where do I Where do I buy my, where do I buy my time back? These are good, these are good areas for you to start to focus on to just kind of understand, where are my key pain points? What do I want to attack first, in order to streamline that workflow?


Craig Jeffery  15:49

Yeah, you know, when you think about some of the things that you just mentioned, Mark, there’s the too many touch points, manual interactions. And I think, you know, Anthony is going to talk about manual directions, but every, every time there’s a manual interaction, it’s slow. It’s inefficient, it creates defects that have to be repaired. So yeah, great, great setup. And go ahead, Anthony.


Anthony DeBellis  16:11

Yeah, absolutely. Thank you, thank you, Craig. So on that point of manual interactions, what was really interesting to us when we’re looking through this data, is that so much of it is really just the lack of remittance data. And, you know, in 2022 2023, it’s still a little surprising to me that these are still such meaningful issues. And, you know, I’ll draw your attention to stat at the bottom of the screen, where that 6%, or a majority indicate that 6% of their invoices require some sort of interaction. So just to bring that to life a little bit. Supplier receives a payment, has no idea what it’s for, and has to call their customer and get those details. And that’s the manual back and forth. 6% might not sound like a big number. But in context of if you’re an organization, mid sized, large organization that processes 10s, hundreds, millions of invoice, 10s of 1000s, millions of invoices a year 6% is a meaningful meaningful work workload. And that’s why you know, thinking about what solutions in the market are available to provide better remittance is just so critical, because a lot of these things, they all tie together. And I’ll tell you what I mean by that is what Mark spoke to on the on the speed to pay issue. If you address that in a vacuum, you still have this issue on the supplier remittance side. And that’s where I think a lot of a lot of the focus in the industry and conversations have been around. How do we bridge these solutions that are AR focused and AP focused, and come up with with really end to end solutions that address these these types of challenges in totality?


Craig Jeffery  18:11

Yeah, excellent. So this brings us to our first poll question, but let me give you some instructions, before people start typing in the chat box, if you would like to see the poll results, and that’ll be shared with everybody. And we had a particular number, the key word to type in the chat box is Vcard, V-C-A-R-D is the word will still count poll, but vcard is the word and if we get 100, let’s just say 150. That’s a small percentage of those who have who are attending, typing. And let me give you instructions for the poll. The poll should be shown on your screen and maybe behind it, what you can see is the question in which areas are you investing heavily to improve payments in 2023, this is a select all that apply or multiple choice, you can pick any of those at the top efficiency, reduction of defects, two types of security questions, working capital liquidity improvements, counterparty support, let’s say supporting a vendor or supplier, other, or none of the above. If you select none of the above, please don’t pick the other ones that would kind of defeat the purpose of that. But it’s a it’s a poll question. It’s not a survey that forces that. So please go ahead and answer those when you’re done. hit the submit button. And then we’ll share that with everyone once that’s done. And if you can, when you’re typing the card during the chat, people are putting in the q&a and individual messages. But either way, Brian has to figure out how to capture all these and and keep the count up. So I think we said what did I say? 150? Yeah, yeah, that’s easy. So we should probably be there and people are really learning by typing vcard. Thanks, Brian for doing that. We have a little fun with this. So on the on the investment side, I’m going to ask Anthony first to respond to the poll questions come up and then Mark so you guys can be prepared as soon as we can see what they are.  Brian’s tracking to make sure how many are responding. All right. Yeah, go ahead. Let’s start us off. What do you notice about this?


Anthony DeBellis  20:15

Yeah, so I’m not surprised. So what I’m seeing, first and foremost is that, you know, efficiency and cost reduction is seems to be the prevalent response across the majority, followed by security, and security, something we’ll talk about later in this presentation. But, you know, from other research from the research, we’ve all done together, from conversations in the industry, this, this seems, you know, right, right on key with, with what I’ve heard, on the cost reduction piece. I think this also ties back and we’ll talk a little bit more in the next slide. But it ties back to all the things that Mark and I have been talking about, with invoice approval issues, routing issues, remittance issues, so it’s really good to see all this data tying together.


Craig Jeffery  21:02

Okay, Mark?


Mark Penserini  21:03

Yeah, I was gonna say I, the numbers, I think, kind of do fall in line with what we’re seeing in the survey. And again, the discussions that I’m fortunate to have with customers and potential customers on a daily basis. So, you know, reduction of defects, I think is is again, this comes back to, you know, finding those ways where we can streamline that workflow, reduce the manual amount of steps and the manual entries, the human error part of it, right. So all of that comes into play there security. Insecurity has been a theme. I know, for us, and for a lot of our customers over the last three years really heavily because of all of the all of the fraud and all the attempts that are made, to steal your money and to, you know, to take, take things that don’t belong to them. So the numbers are right in line with what I what I would have expected.


Craig Jeffery  22:03

Great, thank you. And we’ll continue our discussion on spending and investing. And yeah, let’s, Anthony why don’t you cover this one?


Anthony DeBellis  22:14

Yeah, sure. Thanks, Craig. So, you know, as we just saw on the data, it seems that a lot of this survey responses and all the folks that are kind enough to join today’s webinar, have a similar view that, you know, reducing processing cost simplifying process is a really important investment to be making in the coming year. I think there’s a lot there’s a lot of good reasons for that. I mean, there’s obviously the the foundational frictions that we’ve been talking about. But there’s also some market events that are at play, right, we have, especially in the US an environment of inflation of rising interest rates, economic uncertainty, over the next, you know, 12 to 18 month horizon, I think all that leads into focus on you know, how do we how to organizations really control their costs better? And, you know, as we’ve seen, through all the data that it seems like there’s so many opportunities to streamline and, and really help reduce friction, and the AP and AR space.


Mark Penserini  23:19

I agree, Anthony, I think the other thing is, a lot of technology has really risen to help us processes. So I there’s no lack of, of opportunity to find a solution out there. From a technology perspective, I think that are very good today. And, again, allows you to get into this space without having to buy a lot of equipment, a lot of its cloud based, those are all things I think today that are available that just really weren’t available even five years ago, like they are now.


Anthony DeBellis  23:56

Yeah. And Mark, if I could just ask I mean, do you think, what do you think the big roadblock is for folks? Do you think it’s education? What do you think hold is holding organizations back?


Mark Penserini  24:07

Yeah, you know, I get asked this a lot, even when it comes to the payments, you know, what, who’s your biggest competitor? Well, quite honestly, the biggest competitor status quo. It’s a you know, it’s a big lift to get organizations to adjust, I think, to some of the new technology. The other side of it is because there is so much new technology. It takes a while to kind of figure out and get your feet underneath you what, again, what are my pain points? What do I really need to solve for because you can overbuy and you don’t really need to write you really need to understand your business, your workflows, and again, what are those pain points that I’m trying to solve for? So I can buy what I need. I buy a little extra because I know things are changing, but I think people get stuck and so they just kind of fall back to the status quo, because it’s like, man, there’s just too much for me to analyze right here.


Anthony DeBellis  25:05

Thank you.  Well said, well said.


Craig Jeffery  25:08

So. So Mark, we’ll, we’ll bring it right back to you. So if they’re, they’re looking to make these adjustments, where where are they planning to spend the money? And what does that mean?


Mark Penserini  25:18

Yeah, so, you know, the first one there, AP automation technology, it’s an interesting phrase, first of all, it because AP automation, I think, can mean a lot of things different, you know, differently to different people, whether it’s the procure, you know, process invoice automation, whether you’re using AI or not, all the way through getting those approvals and getting it into your ERP system, or whether it’s the back end of that, which is the payments process, and just automating, you know, the the way the payments are flowing out the door and the the choices you have there, or is it the whole thing. So, you know, rather than me define that, I think it’s something that that each each organization has to define for themselves. So I love to know what’s behind that when they say AP technology, but what I what I look at, and what I hear when I talk to people about AP automation is rather than defining that, whether it’s procure to pay, or whether it’s some aspect of that, and there, it’s why am I doing this, you know, what you’re empowering the business, and especially AP, by reducing your manual tasks, right, you’re trying to reduce that you’re trying to, again, free up cash flow, have better eyes on your cash write faster approval process, faster approval process doesn’t necessarily mean faster pay, but it means faster approval process, so I can manage my investment better than I can manage my time better. And it’s more fully automated, greater visibility into the data, all of that I think, in more control in your financial process, all of that, I think are aspects of that AP technology. And I think that’s why it continues to be risen to the top bank portals, payment services. Again, I think cash management, treasury management, those are all aspects of, of what people are looking to get a better handle on, as organizations are growing, I think at a faster pace. And we’re just seeing a lot of these, these type of areas, you know, looked at, I think, more closely and invested in I think the other thing is that Treasury and AP are probably more tied together today than I’ve ever seen in my lifetime, which is not that long, but still, it’s been a lot of that. And then the, you know, ERP or payment modules. Well, what does that mean? Well, again, whether you’re doing this internally on your own, or whether you’re doing it through, again, some type of AP technology or payment technology, that’s what you’re looking for is is what am I, you know, how can I tie this into my ERP system seamlessly securely, and still get the benefit of making multiple payment methods and not stuck just writing a check, or I’m not stuck, just sending NACHA file to the bank, those those you can do takes it time. But again, I think these are areas where we’re organizations are really looking to gain efficiencies with the right investment API’s. If you don’t know what an API is, an API really is a set of code that allows data to flow, I like to say through a pipe, right, it’s a secure way for me to pass data from, in this case, let’s use ERP, right, you’ve got an ERP system, you go in, you’re making sure you choose your vendors that you’re going to pay today, you push the button and instead of that pushing that button and those payments, that payment run going to a check printer, those that data is pushed through these API’s to a payment technology solution on the other side that allows you then to not have to write those checks and somebody else is going to make the payments on your behalf and give you the benefit of virtual card and ACH and faster pay, as well as check and all of that. But it’s a seer. It’s a secure pay hike, basically or a secure way for you to take data from one system and moving into another. So they’re called API’s. And then again, the last one TMS, payment systems. I think all of this just continues to free up staff to do more strategic work, right. It allows you to utilize your team, whether it’s the trend, treasury management payment modules, or whether it’s your AP staff using the ERP payment management modules. It just allows your team to free up to be able to do better management, more strategic work, hopefully have greater vendor relationships, all of that ties together, and that’s where you’re gonna get your biggest bang for your buck and probably not have to add staff which I think is another thing as we continue to grow our organizations in this in this time. which the economy, you know, is still growing. And I think the saw the numbers the other day was like 2.8%. So, you know, organizations are still growing, but you’ve got to look at that, and how well am I investing? Am I investing in technology? Or do I have to add another person to do this job?


Craig Jeffery  30:17

So, so Mark, or Anthony, you know, as, as you were describing this, Mark, it’s clearly a focus on efficiency. But if you look at the ERP and TMS and the use of API’s, these are all built to streamline through other systems.  Is this a, is this a indicator that, you know, embedded treasury, embedded payments? is going to be a key focus? Or is it really just efficiency and, and nothing else? How would you, how would you answer that?


Anthony DeBellis  30:48

I could jump in. I mean, I think I think both are true. In my my opinion, I think the efficiency is the what, and then the embedded or cloud solutions is really just the how I think what this data says to me, and, you know, a lot of focus I have on is this embedded Treasury cloud based solution stuff is, is here. It’s working, it’s growing. And it’s, it’s resonating. And that’s what that’s what I see in this data is that’s really resonating. And I think for all the reasons Mark said, you know, how do you deploy these types of technologies, without adding headcount to support development and servers, and all these types of things. And this is really just been such a need solve for the industry to just leverage these fantastic technologies to bring efficiencies and a really streamlined way?


Mark Penserini  31:46

Yeah, I agree. I think I think it is both, I think, you know, we we, we are continuing to look at other payment methods, which obviously makes sense, right? I mean, and I, you know, the other part of this whole discussion today is global. Well, we’re more global than we’ve ever been, I think we’ve added more customers making global payments, probably in the last 18 months than in the whole three years that I’ve been here just because of, again, the ability to utilize the solutions, which as Anthony said, are cloud based. I mean, it gives you the ability to plug this in or tie this into your current system without having to make major changes to what you’re doing on the front end. But it allows you or maybe it does, because you’re using some of that on the front end, but they tie in. So you have the ability to just be more efficient. And again, I think a lot of this comes back to cash flow is king, you know, having better data, having more, or having earlier eyes on the data allows treasury to manage the funds better, and to look at this even in a more long term and strategic way that I think they’ve been able to before.


Craig Jeffery  33:06

One last question for you, Mark, you mentioned the last year and a half versus the prior year and a half more, more global adoption. What would you say the change has been? Is it like one and a quarter? One and a half times?


Mark Penserini  33:21

I’d say it’s at least one and a half times? Okay. Yeah.


Craig Jeffery  33:25

That’s really interesting. Yeah. All right. So that brings us to the section on value. I’m sorry, the importance of payments security. We talked about, we talked about how people are trying to steal your money or steal your data and information, payment security comes up is really important across the board. And so Anthony, we’ll start start with you on payment security.


Anthony DeBellis  33:49

Yeah, sure, Craig. Thank you. So I think your first headline is that ensuring payments security and or I should say not having payments, security, remains a really costly and material issue for organizations. And that comes across with the focus, right. I mean, we see, you know, 82% of respondents are saying that importance of payment security has increased. And a lot of it, I think, is driven by you know, the trend and digitalization we’ve seen over the past few years that was certainly accelerated by by COVID 19 pandemic flu forced it forced a lot of organizations to adopt digital payment methods and it accelerated others existing plans. And then when you look across payment modalities there’s there’s different I guess there’s different instances of risk in each payment modality. So some some interesting things to think about. When you’re when you’re assessing payment security. You know, when we think about Payment fraud during the COVID, 19. Era, right over the past three years, we’ve seen pretty significant increases in check fraud in ACH fraud. But across virtual cards, it’s been about a single, like a two to 3% increase, depending on the survey. So single digit increases, as opposed to 30 to 50% increases and other payment modalities. So there are some tangible ways to address this, with technology with payment methods. And with all types of controls and investments.


Craig Jeffery  35:33



Mark Penserini  35:34

Oh, sorry Craig, I was gonna say, we, I jumped in ahead of you, I’m sorry.  We talked about this a lot because, you know, I, virtual card, I say this all the time, virtual card is the most secure, fastest way to pay a vendor. It’s, it’s the less, less likely frauded attempted way for money to get stolen. And I think it’s an important thing. You know, we, we, as an organization, made a decision 26 years ago to partner with Mastercard, and become the largest B2B Mastercard issuer in the country. And I think this is a big reason why.  It’s, it’s the level of security that our customers and our vendors have. And you can just, again, it’s validated because of the single digit on that where other payment methods just continually are getting hit through through all the fraud attempts.


Craig Jeffery  36:39

Yeah, thanks, Mark. You know, and just one other comment on this, the top line, you can see that it’s 81%, either, it’s very important, extremely important to ensure that we have a highly secure payment process. Now I’m going to point us back, see, if you remember, you know, we assess our payment processes, we assess the security of repayment processes. I believe that number was 18% of I remember correctly. So like 18% say, that’s what we do. And yet 81% Say it’s really important. So that’s a that’s going to be a takeaway, I’ll give that one takeaway, you probably want to have all your payment processes reviewed, from beginning to end to see where the weaknesses are. And that’s the, that’s the, hey, we’re recognizing the need. It’s really important. But we’re not doing something fundamental there. Yeah, with that, that brings us to our second poll question that should show up. And again, I think we have, well, now we’re down to only have 125 responses, we need 25 more, except the word Vcard in the chat box. After you complete it, that would be great. And you can follow Mark, Anthony, or myself, you can follow me on LinkedIn or connect and we’ll go ahead and connect with you on LinkedIn, I’d love to continue the dialogue there. Question is about concerns about payment fraud, my concerns about payment fraud in 2023. It will decrease from the levels we saw last year and 2020 to stay approximately same increase from the level we saw on or I don’t know, those are the those are the options. So go ahead and answer those quickly. And we have enough responses, people typed Vcard in, some people to type poll and Vcard. I’m loving that. Thanks for staying engaged. That’s fun for us to see people want to hear and wants to see the results of the polls, you know, besides just on this particular webinar to be able to capture that information, so we’ll insert it into the slides. And, you know, Brian, you can go ahead and type in the connection on LinkedIn thing so people can can connect to any of us. All right, so I’m gonna go Anthony and Mark this time.  More fraud.


Anthony DeBellis  38:58

Yeah. So I mean, it really, you know, short and sweet, it’s a continuation of what we’ve seen is that, you know, 86% is either keeping this heightened awareness or or increasing the level of concern about fraud or payment fraud.


Mark Penserini  39:13

Doesn’t it doesn’t surprise me. I mean, it it just, it’s in line with, with honestly what we deal with on a daily basis. So I can I’m in complete agreement with what I’m seeing on the screen.


Craig Jeffery  39:34

I would love to be able to ask follow up questions about the decrease in the levels of fraud as well because more people return to work. What’s the situation but we can’t do that here. So we’re going to continue on and move to Mark.  Payment challenges and concerns.


Mark Penserini  39:50

So yeah, I mean, the primary challenge there security fraud management, you can see for small and large businesses is is really high. And same thing on the increase of likelihood of fraud. So, you know, our business is in the payment business, right? That’s what we do in Abdon. For the last, at least for me, and in what I call the full AP payment automation solution 14 years. And I think what we’ve seen is the number of fraud attempts, it’s not think what I’ve seen is the number of fraud attempts has just continued to grow daily over what it was even two or three years ago, again, I think it got magnified. I think it catapulted through COVID. Through the pandemic, I think the fraudster saw an opening there and took it. Because teams were dispersed, people were dispersed, they weren’t working in the same office, they didn’t have the ability to have that quick conversation. And things were slipping through. So those concerns again, have not dissipated or gone away, I think they just continued to, to grow. It, you know, it doesn’t surprise me the likelihood of fraud. For smaller firms, the amount of expense and time that it takes to manage those fraud attempts, and to figure out how to continue to combat them is very costly. So if you’re a small organization, with an in we all we all struggle with this. I mean, we struggle with it, even in our sites, right, getting it get getting it is time to do anything, is very difficult, because they’re very busy. And they usually have pretty small team. But, you know, the amount of it time and staff involved in to continue to fight these attempts just continues to grow. So it does not surprise me as high as these numbers are, I would have hoped that these numbers would have started to come down. But this is a real area. I think that wherever you are in your journey of looking for AP automation, or whatever it happens to be. I think these are areas that if I was consulting you to not focus, how do I fix this internally? But how do I find the right solution from somebody who’s doing this as this is their real, this is their job. Because there’s so much going on in this area today that it’s very difficult for an organization that’s just not involved in fraud, to try and take this on on your own. And again, there’s a lot of technology. And there’s a lot of technology companies out there that I think can can augment what you have to do internally to support this.


Craig Jeffery  42:44

Excellent. So as we move as we move to this slide about robust spending expected about combat combating fraud, I just want to give a heads up to mark anything, there’s about three questions or comments in the q&a. And in the chat box. About Friday, I’ll give you an opportunity to respond to any of those that you can. I’m just going to give a quick summary here before we cover any of those responses, this idea of how much you know, what’s the importance of these different options for, you know, handling your connectivity to make sure that there’s a good method of controlling the flow. Each of these is, is pretty significant, very important. Important, you can see all of the ones on the screen from 67 to 77%, which is in the dark red, the top one increase control over payment workflows to reduce fraud. And that’s going to tie back into the top item 18% said, we don’t assess our payments, security was over 80%. So this is like really important. And so this comes back again, it’s like we all know what the issue is we need to evaluate our payment security workflows, and have the control end to end not exposing points and elements to it. And want to say that just for some quick responses.  This next set, when we get to the next section, gentlemen, I’m asking too many side questions, so we’ll have to go a little bit faster on the next section, but handling any of those questions, who would like to address any of those?


Mark Penserini  44:12

Like, well, I can take the first one there will be a shift to B2B e-commerce where cards or RTP play a bigger part, and will this change the dynamics of accounts payable? So I think the answer the short answer is yes. And we see this, I get asked this all the time, you know, are people still, are vendors still taking card? Why are they taking card? Well, I think for a lot of vendors today, that’s just part of their business, right? It’s part of their business model. It’s built into their pricing, it’s built into everything they do. And again, they cash flow is king for them. So if I can get them their money faster in a more secure way, and I can help the customer do that. With less risk of losing that money. It’s going to it’s going to it’s going to be a big win so we continue to see cards grow. I think the same thing is going to happen with realtor on payments, it’s a different model, right? I mean, we’re talking instantly moving money from one bank account into another bank account, and that money settling. So there’s there’s different dynamics to it, but but they’re all whether it’s Faster Payments, whether it’s RTP, whether it’s card, they’re all about securely, and eliminating the fraud and moving the funds as quickly as possible to the vendor. So they got their money and continue to grow their business.


Craig Jeffery  45:29

Sure, Anthony?


Anthony DeBellis  45:31

Yeah, I’ll take the second one, you know, with with virtual cards, and the question is, you know, how to security virtual cards compared to that of, you know, real time payment methods like a Fed wire, or rather an ACH payment? I think, you know, the short answer is, is that with virtual cards, you can embed controls into the payments, you can designate a card to be, you know, for a specific location for a specific amount for a specific for a specific time period, to be used for a single use, or what we’ll call a multi swipe card where it can be swiped multiple times, and that you can put and customize a lot of these parameters into the payment, which allow you to limit the ability for a bad actor to get a hold of them, and also control the destination of that payment. And when that destination payee can actually use those funds.


Craig Jeffery  46:29

All right, great. And we’re gonna have to push on, I know, there’s a number of other comments about V cards. So we’re gonna have to, we have to make sure we do a session on on V cards alone. But that brings us to the next section of value as a driver in payment decisions. And Anthony, we’ll turn it back to you to cover challenges, or emphasis on speed rather? Sure, sure.


Anthony DeBellis  46:51

And I’ll try, I’ll try and make up some time to look, I think, with promoting virtual cards, what we see at Mastercard, with our with our customer relationships, and the folks we talked to and and data we read and come across is that speed is really a key message that resonates with with suppliers from an acceptance perspective. And I see Mark nodding his head, and this is he’s in this business day in day out in such a large way. But coupled with that, there’s a couple other things that are really important. Efficiency and visibility. Namely, because it’s one that I just want to go back and just say that speed is important. And the end to end view is more important, critical. Because just because you can pay fast, you still have to pay without adding a lot of resources to your AP team, and providing your suppliers, you know, some sort of visibility when there’ll be paid and what they’re being paid for. Otherwise, you have those defect issues. So these things all come together. But you know, for now, speed is just such a critical part of giving suppliers showing suppliers, there’s value in accepting the card network, and that value can be distributed around.


Craig Jeffery  48:08

Excellent. That brings us to our final double poll question. So if somehow you couldn’t see on the screen, answer these two, you get credit for two virtual cards, the top one is multiple choice. And the bottom one is single choice.  We, and that just shows how many people have a virtual card program or tried it aren’t using it. And then finally, we’re a corporate and do you see the value of virtual cards or corporate and don’t, we’re a bank do and don’t, we’re other, let’s say a fintech do or don’t just even get a list of those to see. What’s the makeup here of the audience? Who’s seeing what? So give everybody an opportunity, nobody needs to type the word V card in the chat box anymore. We’re, we’re probably passing 200. So we’re we will not bank these for the next V card thing. They all expire. And we’ll share the information. So Brian, as soon as that’s up. We’re going to respond. And Anthony, I’ll have you give any quick comments. And we’ll we’ll just we’ll just move, we’ll move on to Mark with the next slide as soon as, after you make your comments.


Anthony DeBellis  49:22

So we’re just reading through, I’m seeing 45% of respondents have a virtual card program in place, which is wonderful. And we’ve really see this from our data is really it’s such a fast growing payment mechanism, especially in the commercial card space. Virtual the virtual card expected growth rates are just outpacing virtual cards and other TV programs and for lots of good reasons that we’ve been discussing on this call. And it’s also encouraging to see that corporates are seeing the value of avert throw cards. I’d love to dig in. I know, we don’t have time, but you know, I’m seeing 30% of banks that do not do see the value. Okay? Do you see the value so consistent with what we’ve seen in the surveys, and all fantastic.


Craig Jeffery  50:15

Yeah, 15 to one in favor, of course, banks seeing the value and three to one, for corporate. So great information. We’re gonna, we’re gonna I’m sorry, Mark, if you had a if you’d continue


Mark Penserini  50:30

It so I think, you know, for sake of time to think over, you know, it says over half offer accelerated payment terms for virtual card, I think this is a new trend, right? Used to be if a vendor was going to accept terms or accept an early pay, for instance, or some other payment term, they didn’t want to accept card, because obviously, there’s a transaction fee. So they’re already, they’re already in that place. But again, I think we’re seeing this shift because of the value of the card, the time, the time cost for money is just there. And then the bottom one there, three fifths corporate thing, suppliers, see the value in virtual cards, again, totally agree with that, it doesn’t surprise me when I see those numbers continue to go up. And if you think about it from the receivable side, I mean, this is a much cleaner process for them as well as to be able to process that card. And, and as Anthony said, you know, we we use single, what’s called a single swipe single use card. So it’s very secure, very locked down, it’s specific for the amount of the payment. It can only be swiped one time, it has to be swiped for the exact amount. And so it’s very hard for a fraudster to get that and do anything with it. So it just makes the process much more efficient, less chance for security breaks, and the vendors are much more happy with it.


Craig Jeffery  51:54

Thanks, and Anthony.


Anthony DeBellis  51:56

Yeah, thanks, Greg. So, you know, I think this all ties back to a lot of things that we’re talking about is that the end to end value prop is just so critical, with costs and rebates, topping the list. So you know, as I said, prior, you know, traditionally, a lot of solutions have been historically either AP focused or AR focused. And I think with a lot of the emerging solutions that are that are coming out, and ones that you certainly were focusing on, are really looking at that end to end view to provide that, that that cost benefit back to the to the organizations and both the buyers and the suppliers.


Craig Jeffery  52:35

So as we move, we move past the value as a driver in the payments decision. There’s also some challenges that come up. And this there’s a rich set of the challenges that are covered in the survey report. So we’ll pop those up in the the news section. But Anthony, if you would cover the perceived challenges, then we’ll move on to regulatory things after that.


Anthony DeBellis  52:57

Yeah, sure. So from a, from a perceived challenge with virtual cards, I mean, the standout is certainly vendor adoption. And it’s something I think the industry is really working wholeheartedly to address. But I also want to draw your attention to the effort required for supplier enablement, that’s the third, the third bar from your left. There’s significant work to be done there. And it’s certainly an investment in strategic focus for my organization for MasterCard, and looking at how can we opt to help organizations optimize their enablement efforts, because that number three really feeds and helps alleviate the challenge on the adoption level. So if you optimize enablement, you give greater chances for greater acceptance, which is just such a such a huge focus for us.


Mark Penserini  53:55

So this doesn’t surprise me either, the regulation pains.  As I shared with you earlier, you know, the the the amount of security protocols we go to, particularly if you’re using ACH, right?  KYC procedures, know your customer problem is, is the biggest one, if you if you’re going to be in the business of moving money and transferring money from bank bank through Ach, you really have to have your KYC processes in place. And along with that, just the additional security protocols, as I shared are so important to ensuring if you’re going to store vendor data or vendor banking information, that you’ve gone through that process to make sure that that vendor is real, that makes sure that the bank account that they’re using is real and belongs to them, that they’re you know, all of the things that go into the KYC process. And we see this all the time that that organizations particularly smaller ones try to do this, but they circumvented or they don’t do it completely. And now they’re owning the responsibility of the banking information, it’s just a big, it’s a big, big headache. And there’s no way around it, you’ve got to do your KYC. If you’re going to continue to manage and disperse money to your vendors internally, then then that’s on you again, I have a different perspective, right? I come from a world where this is our business. So I certainly wouldn’t want to do it if I was the AP staff or the AP department trying to handle this. The other ones OFAC sanctions, you know, this, this really has to do with more international, FBAR same thing, the last one PCI, you know, information that I think all of those payment card, that’s the payment card information, right, storing that managing that are all in there. But the KYC process is probably the biggest one. Anthony, your thoughts on that, too?


Anthony DeBellis  55:55

Yeah, couldn’t agree more. And even I’d say, over the past five to 10 years, there’s certainly been an evolution in the importance, the the requirements around the space, which I think as an industry, we’re all adapting to.


Mark Penserini  56:10



Craig Jeffery  56:12

Thank you, that brings us to the last, the last content slide before we have some deliverables and content for you to take away, I’ll begin and then Anthony, if you’ll take the middle, Mark, if you’d finish up the different pillars here.  First is recognize that there are a number of pains in payments and those pains may be errors, friction, costs. That’s a that’s a broader concept. The other two, I’ll just summarize the opportunities for payments internally and externally, could be summarized with this end to end view, opportunities for payments internally, to provide control efficiency, visibility, also have the same needs for your counterparts who are receiving those payments or if your receiver, both parties want to see that. So there’s an opportunity to have efficient payment processes that provide visibility that helps for things like forecasting, cash flow, that don’t, that aren’t excessively costly, but also provide protection, because that’s one of the key areas, we have to protect payments. So there’s a number of opportunities across these different dimensions within your organization and between your organization and the pain or the payor or the payee.


Anthony DeBellis  57:28

I think the value is just really completely linked to the recognition of the pain points. Because one, understanding the pain points gives you a northstar where you can go to alleviate those pain points. And you know, as we’ve discussed throughout this panel, there’s so many wonderful technologies that are available today, more so than ever before, that leverage things like cloud computing, like artificial intelligence, automation services, that can really help bring the value to your organization, and have that kind of operational leverage of not having to deploy something heavy in order to get those gains. The key there, though, is education and making sure you have the right folks that can advise you and trusted advisors that can advise you on what are those? What are the most optimal solutions and simple solutions to meet your needs? Because simplicity is really key. You don’t want to over engineer and I think it was a great point raised by Mark earlier.


Mark Penserini  58:31

Craig, there was one question in the chat in the q&a there. It says if a card is single use how our supplier vendor refunds handled? Well, usually through a credit, right? Instead of instead of changing the amount being paid on the card, you’re going to just the vendor is typically going to put a credit, invoice or credit back on to the customer’s account and deal with it that way. It’s kind of like a chat, right? If they cashed the check, they’ve got to either suddenly send the money back or give you a credit against your next bill. So that’s nuts normally what happens in that process.


Craig Jeffery  59:07

Yeah, thanks, Mark. I know there’s a number of other questions in the in the regular chat box, too, that we just have didn’t have time to get to market that you’d bring us home on protection.


Mark Penserini  59:17

Well, so fraud is rampant, as we talked about, I think, you know, understanding the various payment methods that you can use. And then, you know, one of the areas that we see lacking is staff training, right, that for your staff to really understand when it comes to fraud. What am I looking for, for phishing emails for vendor, fake vendor emails, right? vendors that want to change bank accounts, all of those things. There’s a lot of training that goes into that and keeping your staff up to date on the different ways that fraudsters are coming at you I think are very important. And then again, we’ve talked about this assess your payment process. What does it look like today? What does that workflow look like? Where are the pain points? So how do I, how do I augment what I’m doing and reduce the amount of manual processes in it?


Craig Jeffery  1:00:08

Excellent. Thank you, Anthony and Mark, and everybody’s listening in. And I’ll turn it back over to Brian for a couple of key announcements here. Thank you for joining us.


Announcer  1:00:19

Indeed. Thank you, everyone for joining us today, the CTP credits. today’s webinar slides, and a recording of today’s webinar will be sent to you within five business days. And for more in depth analysis on these two surveys, be sure to download the survey reports by clicking the links in the chat box. Thank you and we hope you have a good rest of the day.

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