Introducing Stampli Direct Pay

Stampli Direct Pay - blog image

Dear Stampli Community,

We launched Stampli Direct Pay, a B2B payments service that challenges industry conventions. We set out to make payments the way organizations expect them to be: simple and straightforward. Stampli Direct Pay makes ACH and check payments fast and easy to reconcile. We facilitate one-to-one ACH transactions instead of bulk batches, so there are no more mystery transactions on your bank statements or your vendors’. We also print and mail paper checks from your bank account directly to your vendors, so there’s no question about where the payment came from. 

We are not entering the “payments business,” per se. Rather, we are adding payments as an optional service to our platform because we believe that our customers deserve payment options that do not squeeze their vendors, make reconciliation miserable, or hold data hostage. 

Our goal is to turn payments into a commodity. Below, I’ll talk about how we arrived here and what you can expect from Stampli Direct Pay.

Stampli’s Purpose

Before founding Stampli in 2014, I worked on ERP’s and document management systems. I noticed that digitization had somehow bypassed the AP department. 

My team and I at Stampli studied AP teams to see if we could help. Paying invoices was not that difficult for them thanks to a wide selection of digital payment solutions. We came to a contrarian perspective: an AP team’s success depends on how well it collaborates with the rest of the organization and its vendors. 

The problem that we needed to solve was the divide between AP teams and their non-accounting colleagues. AP teams needed an efficient way to collaborate with peers across their organization in order to get the procure-to-pay process under control. The tasks of validating the terms, confirming receiving, managing exceptions, and determining how expenses should be allocated involve numerous discussions  with tens or hundreds of people inside and outside the organization. 

We built Stampli with all that in mind. Stampli turns invoices into a communication tool, which is why at the center of Stampli’s invoice page you have the feed presenting the story of the invoice and conversations about it. Our approach increases efficiency, makes cost allocations more precise, and ultimately generates more strategically meaningful financial data, all while making the process easier (and some people might say fun!) for all involved. Stampli creates a sense of community for accounting teams and their peers.

Why Payments Now?

Many customers asked when or if we would offer payments, and the answer was “eventually.” But, we needed  to do it in a way that supported the evolution of the AP process, which is the DNA of our company. The payment business is a different species and not something we necessarily wanted to be in—at least not in its current form. 

In our view, the B2B payments business is dysfunctional for three reasons:

  1. The revenue model is built on a conflict of interest. To maximize their revenue, payment providers must convince your vendors to change their agreed payment method and accept payments in the form of virtual credit cards.  Under the misleading banner of “e-payments,” they offer AP departments a rebate and promise vendors faster payment. However, in order for vendors to get the payment, they must accept payments as virtual credit cards, which come with up to a 3.5% credit card fee per transaction. That’s where the “rebate” comes from. This method and its fee strains relations between companies and their vendors. Would you pay 3.5% of your paycheck to receive your salary?
  1. Payment providers are not incentivized to make ACH reconciliation easy. ACH transaction fees range from pennies to a dollar no matter how big the transaction is. As such, providers run ACH payments in batches to minimize the costs. When they debit the batch from your account and divide it into dozens of payments, all identifying information is scrubbed away. That’s why it’s a mess for your AP department and the vendor’s AR department to reconcile payments in their bank statements. Fixing this problem would be disadvantageous for providers, which want you to use virtual cards instead. 
  1. Payment providers hold data hostage. Because most payment providers offer the same services, they are interchangeable, and they know it. To be sticky and prevent attrition, many hold payment data hostage. If you ask a provider for your vendors’ ACH payment information, the provider will make it difficult or even impossible, citing “security” concerns or claiming that you don’t “own” that data. An industry that must hold data hostage on false pretexts is an industry with a broken model. 

To be clear, Stampli is not anti credit cards and virtual cards. They have a time and place. We just don’t think cards should be forced on vendors, definitely not by your payment provider. We had no interest in running such a business model. So, we came up with the alternative the market was waiting for.

The Stampli Approach to Payments

Our goal is not to push you or your vendors to any particular payment methods. Rather, our goal is to make your entire payment process easier, from payment approval to reconciliation.  We’re agnostic towards which provider you use. If you want to use Stampli alongside your current payment provider, wonderful. If you want to use Stampli for the AP process and payments, that’s great too. We create value by making the AP process digital, automated, and collaborative. Payments are an added convenience. 

Here is what we include with Stampli Direct Pay:

  1. Streamlines Payment Preparation: Easy access to all relevant details, invoice approval history, and supporting documents for seamless payment approvals.  Maximum payment flexibility with multiple payment methods (ACH, Check or outside stampli), partial payments, consolidated payments and vendor credits.  
  2. Payment Approval. Separate from the invoice approval, payments come with their own approval process. Payment approvers have easy access to all the invoice documentation and history they need to approve with confidence. 
  3. ACH Payments with Straightforward Reconciliation. Use Stampli to make one-to-one ACH payments that are easy to reconcile. On your bank statement, you will see one transaction with the name of your payee. Your vendor will see one transaction with your company name.
  4. Painless Paper Checks. Pay with paper checks directly from your bank account, with your signature. We print and mail these checks on your behalf. 
  5. Vendor Portal. Collect and maintain payment information from your vendors online. Your vendors can indicate how they prefer to be paid.
  6. Data Ownership. Download your vendors’ payment information and take it to another payment provider if you wish. You own your data.

Shifting the Payments Paradigm

With Stampli Direct Pay, we aim to turn payments into a commodity. Although we have built what we believe is the best solution in the market, we also believe you should have the freedom to work with any payment provider you choose while enjoying all the benefits of Stampli. We remain payment provider agnostic. And we offer Stampli Direct Pay on a month-to-month basis, like Stampli, meaning you are not required to sign a long-term contract. 

Over the years, many of you told us that Stampli has created a sense of community between you and the numerous people you collaborate with throughout the AP process. That was our aim. You’ve also shared constructive feedback that has shaped our product roadmap. You motivated us to make B2B payments the way they should be: simple and straightforward.

Today, thanks to your guidance, we can protect your vendors from outrageous fees, simplify reconciliation, and shift norms in the payment industry. It’s time that payment providers create value through processes, data, and intelligence. 

As always, get in touch with us if you have questions. We thank you for being part of Stampli’s community and for supporting our work.  

Sincerely,

Eyal Feldman, Founder & CEO of Stampli

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