What Key’s Fintech Investments Say About Commercial Payments

by Steve Murphy 0

 This piece discusses the recent equity investment by KeyBank in Billtrust, a fintech delivering automated solutions in the cash cycle, most specifically targeted at receivables efficiency. The writer goes on to say that KeyBank has been at the forefront of B2B payments automation over the past several years, certainly for a regional institution versus some of the money center banks, where fintech investments have been a regular occurrence and increased focus. While we were not able to determine how exactly the Billtrust platform may be getting leveraged by the bank, nor the extent of the investment, it is emblematic of more focus on closing the innovation gap, driving the continued need for banks to stay close in delivering latest generation solutions to satisfy client needs.

Mercator has discussed the topic of partnerships and bank fintech collaboration through reports and other ongoing coverage. We expect a shift from the more B2C/SME focus of many VC investments during the frenzied preceding 4 year run-up in startup money, to a more B2B focus, as developers/entrepreneurs and bank staff adjust to the more complex corporate scenarios to apply technology. The piece touches on the ‘consumerization’ of the workplace, and how it is now becoming much more evident to banks based on client expectations for ‘same as I do at home’ experiences.

“Consumer payments innovation has been going on for several years now,” he said. “A corporate treasurer uses this [technology] in their daily lives; they’re consumers too and they’re saying, Why can’t we have this on the commercial side? Banks’ commercial clients are really starting to become insightful users of the art of the possible.”

Perhaps the most interesting aspect of the investment (or piece if you will), is that there is a receivables or biller-based focus to the announcement and solution. We have pointed out in various ways how receivables typically receive substantially less focus than more client facing payables solutions, but can be just as effective in managing working capital.

Overview by Steve Murphy, Director, Commercial and Enterprise Payments Advisory Service at Mercator Advisory Group

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