Consolidating Payment Streams In the Cloud

Small- to medium-sized business (defined as those with between $500,000 and $50 million in annual revenue) face distinct challenges when trying to pay bills. Printing, processing and mailing paper checks is costly and can be inefficient, and online payment sites are susceptible to security attacks and fraud. A new cloud-based payments service, called MineralTree, is hoping to fill a niche and help these businesses and their bank partners process payments cheaply and efficiently.

MineralTree has three major components. The account manager application is a web-based add-on to the business' existing account systems and integrates directly with the banks payment systems. Another app is used by the business executive responsible for payments to approve and release payments, and is available as an iPad app and secure web application. The third component is the bank operations application, which is used by the bank to manage MineralTree users. All three apps are linked via the MineralTree payments server, which acts as a universal conduit for payment channels, such as check, ACH, wire, cards, and other emerging channels such as PayPal, and mobile banking.

Currently, Silicon Valley Bank (Santa Clara, Calif., $19.2 billion in total assets) is the first financial institution to implement the solution and is offering MineralTree to its business banking customers. Silicon Valley Bank COO Bruce Wallace said the bank agreed to pilot the solution because "this was an area where there was not a lot of solutions out there today."

"We felt this product would be very nice for our clients in the lower-to-middle market range that maybe don't have sophisticated treasury systems, and that it could simplify the accounts payable process for them," he said.

Silicon Valley Bank is offering the solution to 10 of its business clients and plans to roll out the offering for its entire client base in 2012, Wallace said.

He added that the B2B payments process "is still heavily paper intensive" and can be cumbersome for a small company.

"This takes all the different payments streams and makes a single workflow for the client," hr said.

Wallace noted using MineralTree is more secure for businesses than traditional online banking, where the client has to be concerned about phishing scams or accidentally downloading malware onto a computer. He said the solution's architecture, including thumbprint authentication for the iPad app, is more secure than other methods.

Further, he said MineralTree serves the Silicon Valley Bank well because it enables the bank to differentiate its services and increase customer loyalty. "The feedback from our clients so far has been positive," he said.

Bryan Yurcan is associate editor for Bank Systems and Technology. He has worked in various editorial capacities for newspapers and magazines for the past 8 years. After beginning his career as a municipal and courts reporter for daily newspapers in upstate New York, Bryan has ... View Full Bio