Capital One integrates with Melio to streamline B2B payments

The news: Capital One is working with B2B payments platform Melio so its business cardholders can pay their vendors and suppliers using their cards—even where cards aren’t normally accepted, per a press release.

Here’s how it works: Melio acts as the payments middleman between small businesses and vendors. Small businesses can make payments with their cards or Automated Clearing House (ACH) payments through the platform. Melio then transmits the payments to vendors through either a paper check or direct deposit. Vendors don’t have to make an account to receive payments with Melio.

Why it can succeed: The tie-up can help streamline the B2B payments process for Capital One business cardholders while helping vendors avoid expensive transaction fees.

• Cards give businesses a more convenient and faster way to pay their vendors—especially compared with traditional payment methods like checks. This may be why cards are becoming more popular for B2B payments: US B2B card volume is expected to grow 8.3% annually in 2022 and hit $1.792 trillion, per Insider Intelligence forecasts.
• But some vendors have been reluctant to accept card payments because interchange fees can cut into their revenues. Melio’s solution can help remove that friction by letting them get paid in their preferred method.

Although Melio charges 2.9% to accept card payments, it may be a worthwhile cost for businesses that want the speed and convenience of card payments.