Boost Payment Solutions: bridging the gap between AR and AP
When Dean Leavitt talks to us from his base in New York, it’s a characteristically warm and humid summer day in the city. His expansive corner office affords a view right down East 48th Street in Midtown Manhattan. These sunlit streets are lined by some of the largest and most prestigious companies in the world, with more than one in 10 S&P 500 firms based in New York and a city-wide economy that tops US$1.5tn in GDP every year.
These are the companies that Boost Payment Solutions, which Leavitt founded in 2009, are targeting: large, complex organisations wherever they are located in the world. Boost is active in 47 different regions globally and has been focused since day one on enterprise-level B2B spending, building financial tools that help companies to bridge the gap between accounts receivable (AR) and accounts payable (AP).
Leavitt, who himself is a veteran of the finance industry, started a company in 1989 that was focused on the consumer card acceptance industry before running a public company, also in the credit card processing space. He then founded Boost 13 years ago after seeing many failed attempts, by companies big and small, at pursuing B2B payments.
For the first five or six years, they were, by his own admission, an exclusively service-led operation that drew upon third-party technology to help clients. It wasn’t until six or seven years ago that Boost Payment Solutions began to hear from customers who had specific requirements, and so Boost brought on board developers to help build bespoke software solutions internally. Today, the fintech is laser-focused on creating custom solutions that enable large enterprises to overcome whatever challenges they may face within B2B payments – and that can vary wildly from one client to the next.
Bespoke solutions tailored to each client
“Historically, the credit card processing industry has been bifurcated into two worlds,” Leavitt explains. “Those that support the accounts payable side, and those that support the accounts receivable side. Even if they're under a single roof, there's anywhere between a brook and an ocean between the two. It was very important when we started Boost to serve as that bridge and uniquely join those two groups together.”
Much like the Queensboro Bridge, a stone’s throw from Boost’s offices, the traffic that traverses that bridge is diverse. Although Boost focuses on enterprises, there are still variations in terms of industry and geography. “Our buyers tend to be very large organisations”, Leavitt continues. “We have more than 50% of the Fortune 100 that either make payments through us or receive payments from us. So the entities that we work with tend to be very large.
“Our focus is on optimising the way in which enterprise-level businesses pay their vendors and suppliers by utilising proprietary technology and procedures that we've developed over a 14-year period.”
As such, the level of bespoke technology that is required depends on the client and the nature of their business. As an example, Boost Payment Solutions works with some of the largest telecommunications companies in the world. The industry is more account-based, rather than invoice-based, and that calls for Boost to create more bespoke solutions for telco customers.
Often, the telco and their buyer will have different account numbers stored in their ERP systems to refer to the same transaction – either a result of character limits, or sometimes just clerical error. Boost has built a bespoke bridging tool that translates both versions of the same account number so that it’s in the right format for whichever ERP it’s being sent to.
It’s not just telecommunications, though. Boost has clients spanning healthcare, freight and logistics, manufacturing, media and more. All of these companies have pain points that are unique to their industry – even unique within their industry, in some cases – as well as specific requirements for their local market.
Why is the B2B payments sector not working?
For many of the companies that Boost works with, the challenges they face are as old as the corporate card itself. “Since the credit card industry was invented 70 years ago, there were never any specific types of solutions that served B2B transactions,” Leavitt says. “Because of that, most of the processes required to accept a commercial card product now are manual and very HR-intensive. If you're a large organisation that’s accepting a high velocity of these transactions, it becomes a huge burden to your accounts receivable team.
“The industry has caused a lot of that market confusion because there are so many different products and technologies that are being thrown at them, but they’re not a payments business. Their business is doing whatever their business does, so they get confused.”
As a result, Boost Payment Solutions has been dedicating a large part of its time towards educating customers about the various options available to them, helping them to separate the important things from the noise. With more payment solutions constantly coming online – both within B2B and B2C – that noise can become deafening without the right guidance.
“Our ears are our most powerful asset,” Leavitt says. The process of onboarding any new client begins by listening to their story. In any new customer conversation, Boost Payment Solutions is trying to unearth the problems that a prospective customer is facing, as well as where they are going as a business and what problems they are likely to encounter in the future. All of those considerations affect the solution that Boost will eventually build.
“The first thing we do is listen. We listen, we ask questions, we pay attention very carefully to those answers and we dig deeper to make sure that, before we're in a position to make any recommendations, we understand what's truly going on in that organisation.”
The challenges facing enterprise-level businesses
What Boost hears in that initial conversation has the potential to set the direction for an entire customer relationship for years to come. In many ways, it’s like technological counselling. Some of the challenges that enterprises present are unique to their business, but other problems are universal.
Of course, enterprises today have reason to transfer money across borders, whether it’s to pay a supplier or refund a customer. But incumbent payment methods present barriers and costs, including issues related to currency conversion and FX.
To solve those challenges, Boost is building hybrid solutions that rely on one payment modality for part of the payment experience but then switch to a different modality for another part. The result is a seamless experience that reduces cost and improves efficiency for the customer.
In enterprise-level B2B remittances, you often have larger payments, say in the tens of millions of dollars, that incorporate thousands of invoices and their associated details together. Considering that each invoice will have multiple line items and specific details relating to that transaction, it highlights the scale of the problem for Boost to bridge that gap between AR and AP. Leavitt says: “It's imperative that you spend as much time making sure that the remittance detail associated with each transaction is delivered to the stakeholders in a format and a delivery protocol that they can seamlessly ingest into their ERP platform.”
With each new geography comes a fresh set of obstacles, unlike anything that consumers will be familiar with from the world of B2C payments. Leavitt likens it to buying a pair of shoes. It doesn’t matter whether you walk into a store in New York, Rio de Janeiro or Sydney, the process of paying for those shoes with a credit card will be the same for the consumer wherever they are. They tap their card, walk out of the shop with some new shoes, and the merchant will be assured of the money within the next 48 hours. That’s B2C.
Yet in B2B payments, every region has dramatically different circumstances that need to be accounted for. Boost’s customer base covers a broad mix of markets – markets like Western Europe, that are less mature than the US in terms of adopting commercial card use and acceptance; then there are countries like Brazil, which have their own ways of delivering funds that lead to merchants and suppliers waiting up to 30 days for a card transaction in some cases. Other regions are entirely embryonic with respect to utilising a card product to make or receive a commercial payment.
In order to understand these local requirements and differences in culture, Boost Payment Solutions has ‘boots on the ground’ in many of the regions where it is active – including the US and Canada, Mexico, Brazil, Australia, the UK, France and Belgium. It’s something that Leavitt says he wouldn’t go without: “It's really important to understand those idiosyncrasies between regions, and have people locally so you can truly understand what the issues are, what the pain points are, what the friction is, and what the needs are of the businesses in that region.”
Boost focusing on acceleration and expansion
Looking forward to the future, Leavitt says: “I think if you fast forward several years from now, you're going to see a very different landscape in terms of how companies are making payments across borders. I suspect that some of the existing payment modalities are not going to go away, but they're no longer going to be the primary ways to move money. So I think you're going to see increased efficiency, increased speed and reduced cost – because that's what the market is demanding right now – as well as reliability and more reporting capabilities.
“The way in which the data is exchanged among the parties is incredibly important, and certain rails that exist now don't have the capability to carry that data alongside the transaction. Some of the new technologies that are evolving allow you to do that, and it's a very exciting time for cross-border transactions. It's still young, it’s very early days, but it's a very exciting moment.”
One of the areas where Boost will pay particular attention is on crypto and blockchain, where it expects to be extremely active in the next couple of years. The company has an alliance with a blockchain platform, where the initial focus is on using blockchain technology to manage freight and logistics contracts and trigger payments associated therewith. When a payment is due for customers in the freight industry, the blockchain will trigger a request within Boost’s platform and Boost will process that transaction on a commercial card and report the results back to the blockchain.
As the industry realises more use-cases for blockchain, we can expect to see Boost become even more active, but Dean Leavitt warns that its involvement will be targeted and specific. “We’re doing a lot on blockchain and we’ll be doing more in future, where the blockchain itself is used to manage contracts and do all of the amazing things that technology offers. But the enterprise-level B2B community has not yet screamed out for the ability to utilise cryptocurrency for payments. We believe there will be a very appropriate need for it, especially as it relates to cross-border transactions, but for our part the focus will be on government-backed cryptocurrencies rather than cryptocurrencies that are primarily an asset class for investment purposes.”
Boost Payment Solutions is currently in the process of establishing cryptocurrency acceptance capabilities across multiple partners. It expects to be accepting cryptocurrency payments by some point next year. More broadly, the business will continue to focus on accelerating its impressive growth curve and get back to normality following the COVID-19 pandemic. Prior to 2020, Boost had been going live in a couple of new regions every quarter, and Leavitt is hopeful that they now can return to that sort of rhythm.
“We're maniacally focused on growth right now,” Leavitt continues. “We have made some strategic shifts over the last couple of years. We have verticalised our entire organisation, categorising all of our suppliers into one or more verticals. We've also realigned our revenue generation team to be vertical-based, because we have found that, in order to properly serve both the broader enterprise level B2B community and these specific verticals, you have to also be verticalised and align with them.
“That's a big change that we're in the midst of undergoing. It augments everything else we do. We're continuing to go down every other path that we've been going down for 14 years, but that's a big shift, and we're already seeing the positive impacts of that strategy.”