Lloyds Bank signs deal with Billhop

The new services include enabling businesses to make card payments to any supplier, including those that do not accept them already.

The partnership will help Lloyds Bank offer a B2B payment solution to its clients, that simplifies paying their suppliers using the bank’s Commercial Cards. Clients will be able to use a secure payments system to improve supplier relationships through the option to offer earlier payment, whilst at the same time benefitting their own working capital position.

The new solution will help businesses to pay suppliers that do not accept card payments, either because they see little demand from other customers or because the costs involved in getting set up with a Merchant Acquirer are too high.

How it works

The bank’s clients will simply request a payment to their supplier from their Commercial Card credit line through the new payment solution. Billhop, acting as a BPSP (bill payment service provider) performs appropriate compliance checks and debit the client’s card account. Billhop then makes an electronic funds transfer to the supplier’s bank account. The client then pays their card bill as normal, enjoying up to 59 Days Payable Outstanding.

Lloyds Bank and Billhop have already tested the new technology. An initial test payment was made for an existing bank client. The client was able to make the transaction within minutes of being set up on the solution. After the initial test, the client made a second payment to the same supplier, settling a high value invoice of more than USD 300,000.

B2B payment solutions

B2B businesses tend to have longer payment terms with their clients and relationships usually focus on long-term, recurring business. These longer payment cycles have historically lent themself to slow payment processes, like checks.A survey from the Association for Financial Professionals showed that more than half of all B2B payments – 51% – are still made by paper check. Paper checks are not the most secure form of payment, and they are also not the most convenient. For these reasons, a majority of businesses are planning to switch over to digital payment options.

Credit cards are the staple of payments, but not every B2B business accepts them. Just about every business and consumer will prefer to pay with a credit card, but for the business accepting the payment, there are going to be transaction fees involved. If you’re making a payment with a B2B provider, you will need to check if they accept credit card payments.

The world of B2B payments is tough and getting tougher. With accounts payable work already a sometimes-thankless chore of hitting deadlines and keeping vendors and contractors satisfied, a global pandemic and other pressures in 2020 have added a whole another layer of tension. But those who can rise above the tension can be compensated, with global payment volume in the B2B space estimated at approximately USD 120 trillion in recent years.