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Fyle launches real-time spend management for small business credit cards

April 19, 2022
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6
Min Read

Fyle now offers real-time spend management for small business and corporate cards, starting with Visa. With this integration, Fyle will be the first spend management platform to support direct and real-time credit card transaction feeds for Visa.

Why is this significant?

Businesses across the US use commercial credit cards as a major instrument of payment, and banks have been the primary issuers of these credit cards. As of September 2021, there were more than 4000 commercial banks and saving institutions in the US. The six largest issuers accounted for $598.80 billion in commercial card purchase volume in 2020.  

However, banks lag behind when it comes to software experience for managing card spend. Businesses need to wait out the credit float period of 48-72 hours before even viewing a transaction. Corporate cardholders, including large enterprises, have some visibility into card spend from the bank. But, business card holders, i.e., SMBs and mid-size companies, despite forming a large share of bank-issued cards, do not even have access to direct feeds. Instead, accountants must log in to the bank portal to see transactions manually and export data as CSV or PDF files.   

As a result, the spend management space has seen a massive shift over the last decade. Several fintech companies have begun issuing their own cards to solve this problem. They promise a spend management software that focuses on real-time visibility, easier accounting, better user experience and control, along with easy access to cards. Also, by issuing their own corporate cards, these fintechs reduce the dependency on banks for real-time transaction data. 

But to access this software experience, users have to switch their card programs. Switching cards means a lot of change, research and friction for customers around their banking and card relationships, which many of them aren't prepared for. 

The spend management software provided by these fintechs is far better than the one provided by banks. Moreover, businesses can easily manage credit card spend by tightly coupling cards and software. But, to avail these cards, cardholders have to maintain minimum cash balances, ranging from USD 75,000 to USD 250,000. Thereby catering only to VC-funded or cash-rich startups and ignoring most small businesses that do not have ready cash reserves. 

Additionally, these cards are charge cards where balances do not get rolled over, meaning the amount gets automatically deducted at the end of every day or month. While this space has seen a lot of growth and funding activity, it's primarily due to a business model where the product is free. But as we've heard, if you're not paying for it, you are the product. 

These card-first fintechs only address a small percentage of the $1.5 trillion US commercial card spend market. A majority of this spend, about 95% of it, occurs on business credit cards issued by the top 10 banks and financial institutions. SMBs cannot avail fintech-issued cards because they do not meet the qualifying criteria. And even if they did, they would have to switch card programs to access real-time spend management. 

So here's the problem: Banks are brilliant at risk management but do not offer superior software experience and real-time visibility. Fintechs enable seamless spend management but require users to switch cards and create a closed ecosystem, making it inaccessible to a massive market. 

Fyle's real-time spend management for corporate and small business cards 

Fyle has launched a real-time spend management solution for customers using corporate and small business cards in the US, starting with Visa. Fyle will be the first spend management platform to offer direct transaction feeds to users of any Visa-powered credit card from any bank. An SMB or mid-market company can access software without changing their cards. 

Businesses can see card spend as it happens, get enhanced user experience, and granular level controls on whichever Visa card they use. 

“Fyle's integration with Visa is very exciting as it offers their users the opportunity to utilize their own business cards in support of business spend management initiatives. Fyle's 'bring your own card' approach has the potential to provide real-time insights, visibility and control to the millions of small businesses that use business and corporate cards as cash management tools”, said Kevin Permenter, Research Director for Financial Applications at IDC.

With this massive shift, Fyle will be able to address the 95% of the card spend market that uses cards issued by the top banks. 

A cardholder can connect his existing business card to Fyle within minutes through direct secure enrollment, and receive text notifications as soon as the card is swiped. Users can reply to the text with the receipt, and we will match it to their card spend. 

Fyle's AI-enabled engine instantly codes spend information, reconciles the card transaction, and pushes the data to cloud-first ERP and accounting software like NetSuite, Sage Intacct, QuickBooks Online, or Xero. This reduces a ton of manual work and repeated follow-ups for accountants. Instead of referring to multiple tools to get spend data, we give companies and Accounting firms a single source of truth for spend. 

"Aprio is excited about the launch and our partnership with Fyle. Together, we will remove insufficiencies and manual work from expense management for businesses, enabling access to enhanced spending data and prompt closing of their books." said Bruce Phillips, Partner & Managing Director of Aprio's Outsourcing Practice, which is ranked 35th on Accounting Today’s Top 100 Firms

What's in it for the banks? 

Today, customers switch to Fintech-issued cards because the traditional banks do not provide a great experience, indicating a decline in business for banks. As Fyle can now deliver spend management for business and corporate cards, starting with Visa and extending to other payment networks in the next couple of quarters, it changes the game for banks. Now, customers can continue to use their bank-issued cards and leverage existing relationships while accessing Fyle's superior spend management solution. 

“With this launch, we can offer all customers who have corporate and small business credit cards access to powerful, AI-driven spend management software to track & manage their card spending. It also gives us the opportunity to collaborate with card issuers who are losing business to new-age corporate card products, ” said Yashwanth Madhusudhan, CEO and Founder of Fyle. “For the first time ever, customers won’t have to switch their credit cards to get the best spend management experience.

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