We are residing in the 21st century, and here payments are going to answer when, how, and whether the logistics, shipping, and transportation will move. Complexity still prevails, and paper invoices dominate the supply chain.
The virtual cards will be strong and good in getting the purchasers, suppliers, freight forwarders, and truckers to move beyond such pain points. Moreover, virtual cards possess some exceptional benefits as they can fight frauds, set spending limits, and help in enhancing fund flows worldwide.
As per data, about half of the entities do not use or accept this payment option, and they have said that their present system cannot support virtual cards. Also, there is insufficient customer and supplier interest in this in the supply chain.
A Mastercard and PYMNTS collaboration finds out that in-house experts require to be in the right position for deploying or creating and using the cards to their full effectiveness. In addition, 3rd party providers in accessing the virtual cards may help to mitigate some issues without a heavy technical lift.
During the pandemic, the difficulty in paying through checks accelerated adoption, but also companies have discovered other benefits like enhanced visibility and cash flow. This trend will continue in the supply chain operations as the accounts receivable and accounts payable search for efficiencies. In addition, the improved transparency and cash flow visibility boost the financial security of the supplier.
When the financial institutions were asked about the common challenge that their corporate customers encounter while paying the customers, they pointed out the supplier portals and invoice reconciliations. We are encountering the rise of platforms that bring in interaction, automation between carriers and shippers, and embedded finance, armed with AI (Artificial Intelligence) and advanced technologies analyzing and parsing data thoroughly.
The work is already in progress for sure. Still, the revamping supply chain and enhancing the payments flow between the suppliers and purchasers need to be made easier in the future days with the incorporation of virtual cards.