Latest / Leaders In Payments / AR Automation Special Series: Inside Amex's Partnership Strategy with R.J. Ancona, Amex

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AR Automation Special Series: Inside Amex's Partnership Strategy with R.J. Ancona, Amex · Leaders In Payments

• 0:01
  Speaker 1: Welcome to the Leaders in Payments podcast, where we talk to C-level leaders from across the payments landscape.
• 0:06
  Speaker 1: We'll be discussing the products and services that impact the payment space today, as well as trends and predictions for the future of payments.
• 0:14
  Speaker 1: We will also hear stories from our guests about their journeys to the top.
• 0:18
  Speaker 2: So hello everyone and welcome to the Leaders in Payments Podcast.
• 0:21
  Speaker 2: I'm your host, Greg Myers, and on today's show we have a very special guest, RJ Ancona, the Vice President and General Manager of B2B Product Partner and Client Management at American Express.
• 0:33
  Speaker 2: So, RJ, welcome to the show.
• 0:35
  Speaker 3: Thank, you, Greg.
• 0:36
  Speaker 3: Pleasure to be here today with you.
• 0:38
  Speaker 2: Well, if you don't mind, can you tell our audience a little bit about yourself, maybe where you're from, where you grew up, where you went to school, a few things like that.
• 0:44
  Speaker 3: Yeah, our audience.
• 0:45
  Speaker 3: A little bit about yourself, maybe, where you're from, where you grew up, where you went to school, a few things like that.
• 0:49
  Speaker 3: Yeah, absolutely so.
• 0:50
  Speaker 3: I am originally from the Midwest, from Michigan, although I haven't been there in several years living there in several years.
• 0:54
  Speaker 3: I've been with American Express for 24 years.
• 0:55
  Speaker 3: I started out in Michigan in a client management role after graduating from the University of Michigan, business school there, and I lived in Chicago and then London and now New York, all with American Express.
• 1:06
  Speaker 3: So certainly passionate about payments and excited to be here with all of you today.
• 1:11
  Speaker 2: Great, great Well, could you tell us a little more about your role there at Amex and what it entails?
• 1:17
  Speaker 3: Yeah, absolutely.
• 1:18
  Speaker 3: So I actually sit my role and my team is on the merchant side of the business.
• 1:23
  Speaker 3: Sit my role and my team is on the merchant side of the business.
• 1:28
  Speaker 3: So most of my team manages our strategic supplier relationships.
• 1:29
  Speaker 3: So our customers who accept American Express payments majority from our commercial customers on the issuing side, both corporate and small business, although some consumers spend as well and we're organized by industry vertical.
• 1:43
  Speaker 3: We find that the best way to really provide value to our supplier customers is to really specialize in what they do and how they do it.
• 1:52
  Speaker 3: So we are organized by industry verticals and then I also have a specific team looking after our supplier value proposition, so working very closely with our issuing side of the business when they designed products and services for commercial customers in the B2B space specifically, we want to make sure that the suppliers obviously get a lot of value around accepting those products and so we've stood up a team that's specifically focused on representing really the supplier when we design those products, services and experiences.
• 2:27
  Speaker 3: Okay, great.
• 2:28
  Speaker 2: So there's no question that the world of B2B payments has really changed and looks vastly different than it did even a few years ago.
• 2:35
  Speaker 2: So what is one of the keys that this evolving trend you've seen in your work with buyers and suppliers?
• 2:43
  Speaker 3: Yeah, really that's an understatement I would say, greg, I mean it's certainly.
• 2:47
  Speaker 3: I joined this role specifically in March of 2020, right when the pandemic was hitting and certainly like right away, you saw a fundamental change in how B2B digital payments and payments in general were evolving.
• 3:00
  Speaker 3: But you know, it's really moving fast and it's changed even since then, over the past several years.
• 3:04
  Speaker 3: Certainly, across American Express, both on the issuing and the acquiring side, businesses are transacting with hundreds, if not thousands, of buyers and suppliers every day, and so certainly the speed of things has definitely improved significantly, but it's also taken on a new level of, obviously, complexity.
• 3:26
  Speaker 3: The digital landscape has made it, in a lot of ways, much easier to navigate through that complexity.
• 3:32
  Speaker 3: That's kind of been the historic part around the B2B payments landscape, but it's also driven a big rise in the automation of a lot of those processes, services, players in the landscape that are working with our suppliers, and what I've seen is everybody sort of shares the common goal of trying to make it easier, trying to make it faster, trying to make sure that both the buyer and the supplier needs are being met during those transactions, and I think we're seeing that that's cementing better relationships between buyers and suppliers when they do it right, and each side of those relationships are looking for different things, and so we've certainly seen the heightened experience of both buyers and suppliers become more and more important, similar to a consumer landscape.
• 4:20
  Speaker 3: We've seen the data needs evolve, as well as the complexity around, depending on what industry and you're in the decision science, the AI, the regulations that go into that, and so all of that has proved to be really, really dynamic, specifically over the past several years.
• 4:38
  Speaker 2: Okay, so what are you hearing are the most pressing needs of the buyers and the suppliers.
• 4:43
  Speaker 3: Well, I find it's super helpful to sort of look at where the common needs are between buyers and suppliers, right?
• 4:50
  Speaker 3: And so you know no question, buyers want to make payments efficiently and they want to get value for those payments.
• 4:57
  Speaker 3: They want to do it on time, but they also want to maximize their working capital.
• 5:01
  Speaker 3: And suppliers are on the other end of that right.
• 5:04
  Speaker 3: They want to get paid quickly, they want to get paid efficiently and they want access to those buyers to retain their business and to obviously drive customer satisfaction.
• 5:14
  Speaker 3: But a really common element of that is just the cash flow management and the need for working capital on both sides of that equation.
• 5:21
  Speaker 3: And I think the digitization of all of that has played out on both the buyer and the supplier side.
• 5:28
  Speaker 3: So, whether it's an ecosystem that you have within your own company that you want your buyers or suppliers to come through, or a partnership that you have who's helping you automate things more and more across your various ecosystems we see that in a lot of decentralized environments Really, it comes down to you want to drive customer satisfaction but maximize that working capital and do it efficiently, and so I always find when you get buyers and suppliers to understand the common set of goals.
• 6:00
  Speaker 3: Working with a company like American Express, where we come together and try to create that ecosystem where both buyers and suppliers can get those pressing needs met and they can do it efficiently, it becomes really, really important.
• 6:14
  Speaker 3: And I think what's interesting for me, being in payments for a while now, is I've seen how the way businesses approach payments really has the power to sort of make or break those relationships, those cost dynamics, the repeat business and whether they're getting paid on time or whether or not they're making payments on time.
• 6:36
  Speaker 3: I think that's become really, really important and we've started doing surveys and working with our customers to really understand what that dynamic looks like.
• 6:45
  Speaker 3: Recently, our Amex TrendX, our B2B payments edition, decided that a quarter or 26%, of business decision makers are still citing late or slow payments as a common reason.
• 6:58
  Speaker 3: They've stopped working with our buyer or suppliers.
• 7:01
  Speaker 3: So that fundamental need to get paid on time is still really really important.
• 7:05
  Speaker 3: I think we've just seen it take on more and more flavors as invoicing capabilities have come through, as different platforms have evolved.
• 7:14
  Speaker 3: In that same survey, 90% of business decision makers agree that making accurate or on-time payments is a key foundation of having that mutually beneficial relationship with the supplier.
• 7:24
  Speaker 3: So when a lot of people say, like payments are just the tail end of a transaction or, in some cases, the front end, we find that it's much more than that right.
• 7:33
  Speaker 3: It's about establishing the trust between buyer and supplier, understanding the dynamics of how you can work together and, in some cases, evolving the economics of a buyer-supplier relationship much more, and the digital ecosystem has made that much faster and easier, but it is still the fundamental need and that's important.
• 7:54
  Speaker 2: Okay, and you talked about partnerships a little bit, but how has this landscape that you just described inspired Amex's general approach to B2B partnerships?
• 8:16
  Speaker 3: Yeah, it's a great question.
• 8:17
  Speaker 3: So's often dynamics of terms or certain pricing, or dynamics of just how something is being bought between buyers and suppliers, and we're really focusing on making that experience better, making it faster, more efficient, connecting buyers and suppliers, and we're really leaning into the integration connecting buyers and suppliers and we're really leaning into the integration of our model, which is obviously we have both the buyer and the supplier in the American Express ecosystem and that really helps us to create value on both sides of the equation right.
• 8:52
  Speaker 3: And so, with global payments in the B2B landscape continuing to grow, a core piece of our strategy has been both building out capabilities to meet the changing needs between buyers and suppliers but, equally important, partnering and, in some cases, acquiring companies that can add to that ecosystem.
• 9:12
  Speaker 3: And so, whether that be on the AP automation side, the AR automation side or even in the invoice management side, there's a lot of steps in that journey that mean that our ecosystem connecting buyers and suppliers has a lot of room to add value right, and I think we see that playing out in different industry verticals.
• 9:33
  Speaker 3: The fintechs that we're partnering with or that we've seen in the landscape are innovating and adapting quickly to that, in some cases going really, really deep in certain industry dynamics, and we found that some of those partners can supplement the solutions.
• 9:49
  Speaker 3: The bigger banks have to really create a sort of one plus one equals three environment between a buyer and supplier, and I think that's why we're not only further investing in partnerships, but also investing in our own capabilities to be able to drive the agenda of adding value between buyer and supplier, but also creating innovation in the space where it's changing almost on a daily basis.
• 10:15
  Speaker 3: Every time I go visit a supplier, I'm amazed at what specifically is changing, not only in the payments ecosystem, but also in their general supply chain right, and so you know, it's really been important to us that we have the right capabilities and partnerships to be able to lean into the value we can create between buyer and supplier.
• 10:36
  Speaker 2: Okay, so sticking with partnerships.
• 10:38
  Speaker 2: So, on a more micro level, what solutions are these partnerships helping to solve for the Amex customers?
• 10:45
  Speaker 3: Yeah, I think a big portion of what we look to some of these partners to do is to really automate processes, and it can show up in a lot of different flavors, right, whether that's around their specific data needs, their invoicing needs, how just their working capital ecosystem works, like I said before, how their distribution engine works, and whether or not they're selling to the end user or they're selling to somebody who's using their product or service in a solution that they're then making for another end user.
• 11:18
  Speaker 3: We found that it's really about the automation.
• 11:20
  Speaker 3: It's about driving efficiency, reducing errors through the transactions, providing visibility and, lastly, I would say, just accessing more and more commerce in general.
• 11:32
  Speaker 3: You know, one of the good things about the American Express ecosystem is, you know, we do have the ability also to work with suppliers to make sure that buyers are coming back to them, that buyers are able to purchase from them in the least friction way possible, but also that the supplier is getting everything they need out of that transaction in terms of being able to clear a receivable, being able to post their data and their ledger as they need, and so I would say, you know, this has helped us to be able to drive more on-time payments, but it's also helped us to be able to make sure that when the payment is made, that it's coming along with all of the information or the processes.
• 12:16
  Speaker 3: That's making that supplier have more efficient end-to-end processes for their customer.
• 12:23
  Speaker 2: Okay, and you talked about automation there, so can you discuss some specific benefits that automated payment processing, how it's good for both the buyer and the supplier?
• 12:33
  Speaker 3: First and foremost, I will say that, if done right, automation benefits both buyer and supplier, absolutely.
• 12:40
  Speaker 3: You know when you think about for buyers, it definitely means security, you know.
• 12:45
  Speaker 3: It means obviously being able to make a payment out of their own ecosystem.
• 12:49
  Speaker 3: It means not having to pull a card out or, you know, use a digital payment product that facilitates a transaction upon approval, reducing fraud, being safer.
• 13:00
  Speaker 3: And for a supplier, it's definitely about reduced day sales outstanding.
• 13:06
  Speaker 3: It's about reducing the chance of credit losses or risk that might be impacting their cash flow.
• 13:13
  Speaker 3: Definitely about productivity, right.
• 13:15
  Speaker 3: So when you think on both sides, when you think about the productivity of the workforce within a buyer or supplier, that automation can be their friend and can in many ways save a lot of time for other value-added services.
• 13:30
  Speaker 3: And the last bit I'll say I mentioned before is definitely customer satisfaction and loyalty right.
• 13:36
  Speaker 3: Think about your personal life.
• 13:37
  Speaker 3: If you're in an automated ecosystem, that makes it super easy for you to do the thing that you want to do and have commerce with the organization that you're doing business with.
• 13:48
  Speaker 3: It makes you want to come back for more, it makes you have a higher net promoter score for that supplier right.
• 13:55
  Speaker 3: And in the BNB world.
• 13:57
  Speaker 3: It works in the same way.
• 13:58
  Speaker 1: Okay.
• 13:59
  Speaker 2: And I know that Amex recently expanded its virtual card capabilities with a new partnership, so can you tell our audience a little bit about that?
• 14:08
  Speaker 3: Yeah, so we have been on a journey over the past several years to continue to drive value within the virtual card landscape.
• 14:16
  Speaker 3: We see that virtual cards, the technology that is going along with virtual cards, particularly in the commercial space, is growing and it's going to be a large part of where future transactions take place.
• 14:29
  Speaker 3: And what I would say is we've had an ongoing investment in this over the years.
• 14:33
  Speaker 3: We've continued to expand our portfolio of partners, both on the AP automation and probably more recently on the AP automation and probably more recently on the AR automation side.
• 14:42
  Speaker 3: Two partners in particular we have are Boost and Versapay.
• 14:45
  Speaker 3: Both play a generating value in the virtual card space and specifically for suppliers accepting virtual cards, making it easier for them, making it faster and even other elements of the AR automation and AR experience in general.
• 15:01
  Speaker 3: And we find that our teams are much more in tune with the end-to-end AR needs through some of these partnerships, because they're also specializing in things that even go beyond the payments right Data needs, reconciliation needs, even invoice management or digital lockbox needs, things like that, and so we find that working together, we're really creating a lot of value for a lot of our customers, particularly in the accounts receivable, the treasury finance space, but also in the marketing and sales space, because it really helps us to be able to the marketing and sales space, because it really helps us to be able to help the supplier understand how driving efficiency can actually help us bring more buyers to them as well.
• 15:46
  Speaker 2: Okay, and two-part question what specific benefits do you think these partnerships offer to suppliers and what do you think makes a successful B2B partnership like you're talking about?
• 15:58
  Speaker 3: Yeah, great question, I think, for Boost payment solutions.
• 16:01
  Speaker 3: For those of you that are familiar with Boost, we recently announced a collaboration with Boost, and specifically with Boost Intercept, which helps American Express Virtual Card accepting suppliers through the Boost technology, entirely automate the end-to-end acceptance of those, and so what that does is it mitigates a lot of the manual work of keying in transactions of the friction that might be coming from accepting virtual cards, even when you don't even know you're having friction.
• 16:31
  Speaker 3: Oftentimes you find there's somebody in the company re-keying a lot of that information or it's going to an inbox you don't even know about.
• 16:38
  Speaker 3: So it really helps customers save time, it helps them mitigate issues, it helps them drive automation and policy and, very similarly, with our Versapay partnership in 2022, we announced a new agreement to provide suppliers who utilize the functionality of the virtual cards with access to Versapay's collection of collaborative AR network tools, right and modules, and similarly, we're also finding that that partnership helps suppliers when they have even a wider need for different modules as part of their AR automation journey journey.
• 17:19
  Speaker 3: They also end up also being able to access the wider suite of Versapace solutions, which includes other modules that can help drive efficiency savings, and so we proactively bring those to our customers, because we think these are two partners that really complement the value that we're providing to the supplier as well.
• 17:39
  Speaker 3: And we also trust and know that we all share a common goal toward the customer of helping them really improve and helping them grow right, and so those are two examples of partnerships that we've done relatively recently that we feel really good about.
• 17:54
  Speaker 2: Okay, and how does Amex maintain and grow partnerships that continue to deliver the advantages for both the buyer and the supplier?
• 18:02
  Speaker 3: I think having like-minded partners is really, really important.
• 18:05
  Speaker 3: So I kind of just hit on it a little bit.
• 18:07
  Speaker 3: But a big thing that we evaluate when we look at different types of partners is their overall commitment to the customer experience, and particularly with fintech partners, where they can help us improve that customer experience, and because we're unique in that we have relationships with both buyers and suppliers, we find that it's really really helpful also when we partner with companies who really understand that ecosystem in a lot of detail, so they don't just take a one-sided view.
• 18:35
  Speaker 3: They understand the value.
• 18:37
  Speaker 3: They might specialize in one end of it, but they really understand the customer journey.
• 18:42
  Speaker 3: They understand that we're trying to create value between both buyers and suppliers, and in many cases they might be both buyers and supplier customers of American Express, commercial card customers and acquiring merchants or a merchant that we've acquired and so their motivations are inversely related, but oftentimes they're just different ends of the same coin, and so we find that when partners share that sort of more mission-driven customer focus, we really can work well with them to sort of optimize that ecosystem.
• 19:13
  Speaker 3: The other thing I would say is a consultative mindset.
• 19:16
  Speaker 3: So one of the best things about our FinTech partners is when you can get on the phone with them, you talk about a customer opportunity or challenge and you really feel like you're approaching the customer together from a place of consulting and wanting to help them grow and ultimately thrive, and we really want our partners to be able to meet us there, too.
• 19:38
  Speaker 3: We spend a lot of time, particularly with our client management teams, really helping them understand how to be consultative in their space in AR, but also in the industry that they're working in, and so we find that results in a lot of really timely meetings, really thorough follow up with the customer on the terms that they want and really just overall ecosystems that are set up with a strong baseline for future trust and growth.
• 20:03
  Speaker 2: Okay, so, rj, as we come towards the end, we've obviously had a great discussion about AR automation, virtual cards, partnerships.
• 20:12
  Speaker 2: Is there anything else you'd like to add before we wrap up the show?
• 20:15
  Speaker 3: One thing I'll just add is it's really very interesting and exciting that the space is changing really quickly, and I think open lines of communication between buyers and suppliers is really, really key.
• 20:28
  Speaker 3: So every time I talk about this ecosystem, I talk about how one size fits all approach isn't going to cut it in the future world, right.
• 20:37
  Speaker 3: It's much more of a dynamic landscape.
• 20:39
  Speaker 3: It's much more around customizing relationships between buyers and suppliers as it relates to payment preferences, payment optimization, everything in that journey.
• 20:51
  Speaker 3: And so I think, both with partners but with customers, the communication and transparency is super important and nine times out of 10, it helps you get to a win-win situation with the customer and it helps a buyer and supplier come to a win-win situation when you look at it just from a supplier lens, who's obviously trying to focus on DSO, or just on the buyer end, when they're focusing just on DPO.
• 21:14
  Speaker 3: When you create value in the middle, it involves communication and it involves understanding the value drivers on each side, and I think that's only going to get heightened as software and technology automation continues to develop.
• 21:29
  Speaker 3: And the other thing I would say is the customer journey, customer choice.
• 21:32
  Speaker 3: That continues to be a really, really important aspect of the payment ecosystem and I think that's going to continue to get heightened as automation comes.
• 21:43
  Speaker 3: Things like AI come to be more developed.
• 21:46
  Speaker 3: They evolve the ecosystem.
• 21:48
  Speaker 3: I think that customer mindset, customer satisfaction and the journey that's becoming much more consumerized, I think is going to be a thing I'd want to leave people with.
• 21:58
  Speaker 3: But thinking about your customer first is always a good answer.
• 22:01
  Speaker 3: Great great.
• 22:02
  Speaker 2: I think that's a great way to end the show.
• 22:04
  Speaker 2: So, rj, thank you so much for being on the show today.
• 22:06
  Speaker 2: I know your time is very valuable, so I really appreciate you being here.
• 22:09
  Speaker 3: Thank you, Greg.
• 22:10
  Speaker 3: I'm happy to be here.
• 22:11
  Speaker 3: Super exciting.
• 22:12
  Speaker 3: Thanks for having me.
• 22:13
  Speaker 2: Absolutely, and to all you listeners out there, I thank you for your time as well, and until the next story.
• 22:23
  Speaker 1: Thank you for joining us this week on the Leaders in Payments podcast.
• 22:25
  Speaker 1: Make sure you visit our website at leadersinpaymentscom, where you can subscribe to the show and where you'll find our show notes.
• 22:29
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