Amex has teamed up with
Germany-based business software provider SAP to develop a new
electronic payments gateway for the firm’s corporate customers.
Charles Davis looks at the system and how it intends to streamline
companies’ corporate expense processes.
Go deeper with GlobalData
American Express (Amex) and SAP are
working together in an attempt to streamline the electronic payment
processing functions that can delay or deter corporate adoption of
electronic payments.
The software system they have
launched provides Amex customers with a portal designed to reduce
the often high cost of deploying electronic payments and eliminate
the need for a myriad of third-party systems.
The companies plan to make the
solution available in the first quarter of 2011. As part of the
agreement, Amex will license SAP NetWeaver PI technology and SAP
will be the first company to deploy the new Buyer Initiated
Payments (BIP) solution.
“By working with SAP, we
are greatly reducing the need for a company to use its limited IT
resources by making Amex’s automated payments available to those
who are the end users – the finance department – without first
having to implement new software or technology linkages,” says
Molly Faust, an Amex spokesperson.
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By GlobalDataCompanies today use many different
system interfaces for electronic transactions between their banking
partners’ and corporate suppliers’ systems as well as between their
own enterprise resource planning systems.
These interfaces are often based on
a wide variety of protocols, proprietary standards and
technologies, and involve costly custom-developments as well as
significant maintenance costs.
In terms of what each partner
brings to the table, functionally Amex provides the payments
automation system that fits into SAP’s enterprise software, which
typically is the system responsible for every aspect of a company’s
operations ranging from human resources to finance and essentially
any other internal department.
Plug and play
Some 3,500 large companies use
SAP’s NetWeaver application and are likely candidates to benefit
from a payments automation program, Faust says.
“This means we are introducing each
others’ technology or providing an additional reason for our
respective clients to choose the partner’s product,” she says.
The Amex-SAP solution will feature
a “plug-and-play” utility to enable SAP customers to adopt
electronic payments quickly and easily by integrating payments
solutions with the underlying technology that powers an
organisation’s business processes.
The utility is also being designed
so corporations can enhance controls and optimise the timing of
their payments, improving their access to working capital.
The integrated solution combines
the power of the Amex BIP solution with process integration
technology from the SAP NetWeaver technology platform.
Amex’s BIP solution is a web-based
payments automation tool that helps companies improve every aspect
of the payment process.
Benefits include the ability to
extend Days Payable Outstanding (DPO) or float, maximising
short-term cash; the ability to increase the volume of electronic
payments, reducing costs associated with paper cheques and supplier
inquiries; enhanced payment security, minimising fraud; and a
dedicated customer service channel.
SAP’s NetWeaver product is a
technology platform that enables process integration – the
technology used to facilitate data exchange between a company’s
internal software and that of external parties, like Amex.
SAP NetWeaver PI serves as an
integration broker to mediate exchanges between a company’s own IT
systems and those of external parties.
The process integration technology
being put in place is intended to maintain the payment data’s
integrity, as well as ensuring the system fits in with the
workflows and approval processes of customers already running SAP
software.
Strategic move
Corporate payments processing is a
relatively new area of emphasis for Amex’s business. The issuer
began a push into general B2B payments in 2006 with its purchase of
B2B payments-specialist Harbor Payments, and in 2008 it acquired GE
Money Corporate Payment Services, which included 300 corporate card
accounts and a patented electronic payment and settlement tool
called vPayment.
“Corporate clients typically have a
fragmented base of treasury workstations, trading systems, accounts
payable solutions, payroll processors, and other financial
solutions that exchange data internally and externally with banks
and corporate suppliers,” says Jeanne Capachin, research
vice-president at IDC Financial Insights, an independent research
and consulting company.
“More standardisation of data and
better connectivity between buyers and suppliers are needed.
“It is in recognition of the pain
their corporate clients experience managing multiple third-party
systems, SAP and Amex are working together to increase ease of use
and reduce costs for customers deploying and maintaining payment
solutions,” Capachin adds.
Amex’s Faust says several factors
led to the decision to partner with SAP, including the prolonged
challenging economic environment, which is forcing companies to
continuously look for “greater visibility into spend” and to
achieve greater control over cash flow.
Faust says: “In the US especially,
a majority of corporate payments are still made by cheque, which
offers buyers no real benefits and is a costly means of making
payments.
“Commercial payments is an important business for Amex and we
are focused on continuing to build our very strong position in
travel and entertainment spending as well as aggressively expanding
to other categories of corporate spend.”
