By Andrew R. Johnson
Discover Financial Services (DFS) struck a deal with a unit of
German software maker SAP AG (SAP) to process payments made between
businesses, the credit-card company's latest effort to expand
beyond lending.
The Riverwoods, Ill.-based company said Wednesday it's
partnering with Ariba to offer the service, which will help
companies more quickly match up payments they make to each other
with invoice information, a task analysts say remains a hurdle for
businesses because much of their transactions are performed
manually using checks.
About $30 trillion of business-to-business payments are still
made mainly with paper checks, Discover said.
The companies expect the service, dubbed Ariba Pay, to be
available next year. Companies will be able to create purchase
orders, receive invoices and send payments electronically using the
service, speeding up the time it takes to process payments and
address disputes.
SAP acquired Ariba last year for $4.3 billion.
Other credit-card companies, banks and technology vendors have
developed platforms in recent years to provide commercial customers
with similar services.
Visa Inc. (V) and U.S. Bancorp (USB) in 2009 formed a joint
venture called Syncada that other banks can use to help businesses
automate invoice payments. Syncada said it processed more than $21
billion in payments last year.
Discover's biggest business is credit-card lending, though it
also operates a payments network for processing transactions,
competing against Visa, MasterCard Inc. (MA) and American Express
Co. (AXP).
The company has reached deals in recent years intended to funnel
more transactions over Discover's network.
Last year it unveiled a partnership with eBay Inc.'s (EBAY)
PayPal unit. Discover is working to equip its nearly eight million
U.S. merchants to accept PayPal as payment option in their physical
stores, a departure from the eBay unit's roots as an tool for
paying for online purchases.
Write to Andrew R. Johnson at andrew.r.johnson@dowjones.com
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