On Oct 15, 2012 Bottomline Technologies (NASDAQ: EPAY) announced that its B2B settlement network, Paymode-X, surpassed 200,000 members that are actively exchanging electronic payment (ePayment) and remittance data. In addition to this, the company announced that Paymode-X has now expanded payment capabilities to support 23 currencies spanning more than 30 countries. The network had first increased its global reach by enabling travel companies to send electronic commission payments and remittance detail to their agents around the globe. Both of these aspects (size and global reach of the network) were noted in Ardent Partners research (ePayables 2012: The State of the AP Market) as the top two aspects of selecting a supplier / payment network.
Bottomline provides cloud-based payment, invoice automation/processing and cash management solutions. The company’s solutions help enterprises streamline, automate and manage processes involving payments, invoicing, global cash management, supply chain finance and transactional documents. The Paymode-X network was acquired by Bottomline in August 2009 from Bank of America Merrill Lynch, who continues to be a long-term strategic partner.
Over the last several years Bottomline has experienced significant growth and this announcement is proof of that. The Paymode-X network and its 200,000 members are active and already exchanging various forms of electronic payment and remittance details with one another. In fact, the network currently processes about $125 billion in payments, mostly ACH but also wire and checks. Migrating to ePayments presents a tremendous opportunity for enterprises to not only reduce costs and improve efficiency but to gain greater visibility and control of this critical aspect of any business. For both buyers and suppliers, a payment network such as Paymode-X among other things provides visibility into payments that are coming due and early notification into when suppliers will receive their payments, both key aspects of cash flow management.
One of the biggest challenge for enterprises that wish to migrate to electronic payments is supplier enablement; the more suppliers that participate the more successful the program. This is why Bottomline includes a vendor enrollment service as part of its offering. The service combines experienced professionals and a rigorous on-boarding process with a large connected network to help its customers through this on-going process.
Why is this network different from others?
Well, in most other cases (for e.g., Basware, Ariba) networks are focused around the receipt and processing of purchase orders and eInvoices with very limited capabilities if any, on the settlement side. Bottomline has spent the last several years focusing on just this; building one of the largest settlement networks (they also offer eInvoicing and processing capabilities). The company has a tremendous opportunity not only to grow its settlement network globally but to extend its footprint with current clients to cover the entire AP Process (receive, process and pay). Some key features of the network are:
- Paymode-X is a cloud-based electronic invoicing and payment network
- Bottomline provides vendor enrollment services – For e.g., an on-boarding project manager will define and create an outreach program that includes appropriate messaging and communications. Paymode-X also has various features which encourage suppliers to enroll, for e.g., informing a supplier that buyer A, B and C have requested that you join the network.
- Bottomline’s development team works with buyers and suppliers to create payment file formats that are acceptable to both
- Bottomline maintains all the suppliers’ bank account and ACH information; often buyers are not comfortable doing this themselves
- Provides suppliers with robust remittance data – All the data that can be shared from buyer to supplier is shared and suppliers have a choice as to the format they view the data in.
- Paymode-X provides greater visibility into payments for both buyers and suppliers helping with cash flow management and working capital optimization
- Before going live, vendors go through a authentication process that utilizes third-party data sources to verify company information, bank information, etc (applies to international suppliers also), thereby protecting against fraud
- Paymode-X iPad app allows users to view payment status and remittance details and also search for invoices or payments
Bottomline Technologies (and its Paymode-X network) is certainly a company to watch over the coming years, the company shows great expertise and a relentless focus on the ePayments space and is positioned perfectly to make a big impact globally, especially with the high valuations that are placed on networks and network based revenue. I expect that we will see a lot more from this company in terms of a greater focus on growing the network and its global capabilities as well as further investment in its eInvoicing features and functionality.
