HSBC

Background

With suppliers located around the world and across a wide range of industries, our client, a global healthcare provider, was faced with processing payments using a number of different methods, to accommodate the needs of their varied business partners. HSBC’s Virtual Card, which uses Virtual Card Numbers to initiate payment, offered a streamlined, affordable and secure solution. 

Challenges

In the past, HSBC clients were settling supplier payments primarily via BACS or cheque upon invoice processing. These payment methods created challenges as many suppliers preferred immediate or faster payment, or required settlement or guaranteed payment via a credit card. When the HSBC clients could not satisfy specific payment requirements, the company would have to trade with an alternative supplier. 

Furthermore, paying some overseas suppliers using traditional forms of payment became expensive since the payment and reconciliation stages of HSBC clients’ procurement process were time-consuming and required heavy manual intervention. In order to pay a supplier, the accounts payable department would have to raise a purchase order and create a payment request within the internal procurement system required for approval from a cost centre manager. The reconciliation process of matching purchase order data to transaction data was cumbersome for their employees and susceptible to error, which proved especially frustrating for low-value purchase orders. 

Solution

HSBC’s Virtual Card is an online payment portal powered by Conferma, which enables customers to generate Virtual Card Numbers (VCNs) to pay their suppliers, automating B2B payment processes while also delivering precise reconciliation of corporate spend. 

To help HSBC clients overcome these challenges, they began using HSBC’s Virtual Card solution to pay a multitude of suppliers in a variety of different sectors, from hospitals to hotels. 

As a result, suppliers receive payment faster – Since adopting Virtual Card, HSBC clients have been able to satisfy their suppliers’ requirements for a more flexible method of payment. Once a VCN has been generated in the online portal for a purchase, the 16-digit VCN and three-digit CVV is communicated to the supplier either over the telephone or via an online interface. Upon charging the virtual credit card number, the supplier receives payment almost immediately, alleviating the cash flow concerns associated with other payment methods and improving relationships with suppliers. 

Automated reconciliation has streamlined the procurement process – The procure-to-pay process, from processing a purchase order to reconciling the purchase data and transactional data, is estimated to have cost HSBC clients £30-40 on average per purchase order. Using HSBC’s Virtual Card, completely automates the data reconciliation process and ensures a 100% matching rate. HSBC clients estimates the virtual card has reduced their internal costs by over 50%. Adoption has also been well embraced by their employees, who no longer have to raise purchase orders or goods received notes and are in control of when suppliers receive payment, when using VCNs. 

Added security – The solution provides an alternative to issuing multiple physical payment cards to HSBC clients’ employees. Each VCN deployed is unique to that purchase and is capped with a designated credit limit. Any VCN request with a credit limit over a designated threshold is referred to a line manager for approval, instilling an extra layer of security, whilst providing an audit trail of spend authorisation for all high-value transactions.