New way for companies to pay their suppliers, vendors

UOB says it has seen an almost 20 per cent increase in the use of payment cards by companies over the past five years.
UOB says it has seen an almost 20 per cent increase in the use of payment cards by companies over the past five years.ST FILE PHOTO

UOB's virtual payment system aims to help firms manage costs

United Overseas Bank (UOB) has released an online payment option for firms that will help them raise productivity and manage costs.

The UOB virtual payment solutions suite lets firms pay vendors and suppliers through a virtual corporate credit card account, even if they do not take card payments.

The vendor or supplier collects immediate payment, while the company gets interest-free credit that allows it to extend cash flow for up to 90 days.

The payment solution is automated, so firms do not have to manually process payments, freeing them up for other areas of the business.

Japanese giant NEC Asia Pacific and 18 small and medium-sized enterprises have used the new system in a trial phase.

MANAGING CASH FLOW

Our 18 suppliers, which are all SMEs, benefit as they receive their payments faster. This helps them manage their cash flow more effectively.

NEC FINANCE DIRECTOR SANDRA KWOK

NEC said it has improved its payment processing to fewer than seven days, from up to 60 days.

The company's finance director, Ms Sandra Kwok, said: "Our ability to pay with a credit card, even when our supplier does not accept this form of payment, has enabled our finance team to reduce the time spent on reconciling payments.

"Human error is also minimised as the process is now largely automated. At the same time, our 18 suppliers, which are all SMEs, benefit as they receive their payments faster. This helps them manage their cash flow more effectively."

Ms Jacquelyn Tan, the UOB head of personal financial services in Singapore, noted that the bank has seen an almost 20 per cent increase in the use of payment cards by companies over the past five years.

"The companies appreciate the ease of account reconciliation that credit cards bring. As their SME suppliers generally do not accept credit cards, the companies have had to rely on time-consuming cash and cheque," she said.

"Our corporate customers can (now) pay their SME suppliers as well as reap the benefits of using credit cards."

A version of this article appeared in the print edition of The Straits Times on March 01, 2017, with the headline 'New way for companies to pay their suppliers, vendors'. Print Edition | Subscribe