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As more corporations try to streamline A/P operations through automation, financial companies are seeking ways to enter this evolving market. Mastercard has integrated electronic invoicing into its B2B payment gateway, joining the list of companies encouraging businesses to move away from paper processing. A growing number of banks are offering e-invoicing technology to their corporate clients, often using third-party vendors, as Mastercard is doing. Analysts say the opportunity is great as more companies automate, but the question remains open how large financial companies’ role will be in that. Mastercard said it had linked its Mastercard Payment Gateway with the e-invoicing system of iPayables. This integration was done initially to help the cargo airline Atlas Air Worldwide Holdings execute payments on its corporate purchasing cards, but Shari Krikorian, Mastercard, said other banks also could offer the integrated system to their corporate clients. ‘If there is customer demand for Mastercard to integrate with another provider, we would be open to that.’ Krikorian said iPayables & Atlas had come to her company to handle card payments; the vendor was working with the airline. Transcepta announced it was working with Monster Worldwide to incorporate electronic invoicing into its enterprise resource planning system. The companies said this project is to improve workflow management; they did not discuss the financial aspect of executing the payments. Krikorian said the impact was minimal on the issuer, US Bancorp. ‘For the issuer, it’s pretty much business as usual.’ Duncan Jones, Forrester, said the argument for automation is compelling, though the market is fragmented. As a result, ‘I think a lot of buyers are a little bit confused.’ The 3 big domestic payment portals operated by financial companies - JPMorganChase, American Express & Mastercard - do not communicate with one another & Forrester has identified 13 providers of electronic invoicing services that have a market share of at least 1%. Those facts argue for both a consolidation among small providers & more interoperability among big ones. Forrester said in a January report that most buyers will have adopted electronic invoicing & payments by 2010, & that all B2B suppliers will have to be able to support it. A growing number of banking companies are entering the market. BB&T started offering its Supply Chain 360 service in March with GXS. Paul Houston Baity, BB&T, said executives in all parts of the company were hearing demands from customers. ‘Supply chain is the hottest product out there among all the banks.’ BB&T took a collaborative approach involving several units, including trade services & international finance, commercial finance, & treasury management & payments. The first couple of customers went live on the service at the end of last month. Baity would not identify the companies or their industries, but the growing internationalization of manufacturing was propelling the shift. ‘These guys went from being a manufacturer to being a brand manager or a distributor. They want more services beyond making the payment.’ The BB&T-GXS service processes purchase orders & invoices, so that corporate buyers can automate the processing into their centralized systems, whether using letters of credit or open account, & then executing the payments through domestic or international wire transfers, ACH transactions, checks, or card payments on behalf of its clients. ‘This is a total solution. I think it is what they are ultimately looking for.’ Fundtech Ltd. announced last month that Royal Bank of Scotland is offering its Accountis e-invoicing service. Ian Watkinson, Royal Bank, said the service was a logical extension of the kind of capability that bankers have long offered their corporate clients, such as connectivity using electronic data interchange. ‘EDI works for large organizations to connect to large organizations; e-invoicing complements this & offers a way to get all your other suppliers to connect to you. We are offering customers flexibility on the data formats that the service supports & trying not to be prescriptive about the data formats customers must adhere to.’ David Fish, Mercator, said the market is likely to continue to include both bank-owned portals, such as JPMorganChase’s Xign, & vendor sponsorships of various kinds. ‘In corporate payments, it’s all about the relationship & not just the product,’ & many banking companies ultimately will offer some kind of electronic invoicing. ‘Whether they build, partner, or buy, that’s another question.’ Shan Haq, Transcepta, said its project is designed to improve the efficiency in Monster’s accounts payable unit, though e-invoicing could be an attractive service for banks to offer to their business clients. Like the wholesale lockbox services many big banking companies offer, e-invoicing provides valuable information in addition to the payment itself. That is particularly true in complex B2B transactions, where ‘it’s a pretty complicated reconciliation.’