Provider Insight

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Portions of the following content were featured within the November 3, 2014, blog post, Recast your ballot: Does BIP or SIP win your vote? In addition, learn why one bank opted out of Virtual Cards and obtain an end-users insight on the two primary types of ePayables.

ePayables: BIP vs. SIP

Recharged Education’s Lynn Larson asked Bora Payment Systems LLC (“Bora”) about their views of the two primary types of ePayables solutions: buyer-initiated payments (BIP) and supplier-initiated payments (SIP). The following content reflects their opinions. Bora is a business-to-business BIP solution provider, as described at the end of this page.

According to Bora, the “best” AP system is one that matches the needs of the buying organization (end-user).  When it comes to making AP payments, most end-users are interested in security, scalability and swift reconciliation. Because these payments are commonly linked to a pre-existing contractual arrangement between the parties (end-user and supplier), the system must deliver on that promise. That said, there are certain payer and payee attributes that lend themselves to a supplier-initiated payment (SIP) system. For example:

End-User (Payer) Profile for SIP

  • Less than $5 million in annual AP card spend
  • Many non-recurring payments to suppliers
  • Web-based and T&E purchases

Supplier (Payee) Profile for SIP

  • Often paid infrequently
  • Interchange is not key determinate of P-Card acceptance
  • Does not receive aggregated or high volume payments

When these two profiles exist, the “better” AP system for the end-user will be SIP. Conversely, different profiles make a buyer-initiated payment (BIP) solution a better solution for the end-user. Project scale alone can render any SIP solution unwieldy, all else held equal, since reconciliation capability decays rapidly in the face of an email based delivery system. As a generic guide, attributes that lend themselves to a BIP system include:

End-User (Payer) Profile for BIP

  • Greater than $3 million in annual AP card spend 
  • Recurring payments to the same suppliers
  • 10% to 20% of suppliers receive 80% to 90% of payments

Examples of end-users who benefit from BIP: healthcare/medical industry, universities, large corporations, small corporations with concentrated suppliers, and government agencies who want audit features.

Supplier (Payee) Profile for BIP

  • Receives at least $30,000 in annual AP payments
  • Not offering early payment terms already
  • Ideal if accepting card payments already

As Bora noted, BIP also uniquely provides suppliers with quantifiable reasons to participate: lower transactional cost, less AR effort and control over payment timing. Yet not all BIP systems are the same.

Bora’s Payer Direct Hub® is one option; the distinguishing features are listed in the table below.

Payer Direct Hub® (PDH)  

To learn more about the patented Payer Direct Hub®, visit: http://borapaymentsystems.com/PDHDemo1.htm.

To learn more about the patented Payer Direct Hub®, visit: http://borapaymentsystems.com/PDHDemo1.htm.

About Bora Payment Systems

Bora Payment Systems LLC, owns and operates the Payer Direct Hub® (PDH), a business-to-business Buyer-Initiated Payment service for purchase cards. PDH allows commercial card clients and resellers to pay invoices from a single website with minimal or no integration. The system reduces AP expense and boosts P-card revenue share for payers, while helping suppliers cut costs through reduced labor and precise control over interchange rate qualification. Payer Direct Hub® provides significant cost incentives for suppliers resistant to P-card transactions.

Web: www.BoraPaymentSystems.com