Buyer-Initiated Payments: How BIP Works and How It Compares With Supplier-Initiated Card Payments
Buyer-initiated payments (BIP) are card payments that the buyer's program pushes directly to the supplier, so nobody on the supplier's side types in a card number. The buyer approves the invoice and sends payment instructions, and the card issuer pays the supplier.
The usual alternative works the other way around. A buyer emails a virtual card number, and someone in the supplier's receivables team runs it through a terminal, invoice by invoice, then hunts for the remittance that explains the charge. Most supplier pushback on card payments traces back to that manual step. Is the buyer-initiated model better? For the right suppliers, yes, though the payment model matters less than whether anyone owns supplier enrollment.
Key Takeaways
A buyer-initiated payment removes manual card entry from the supplier's side. The buyer's instructions trigger the payment, and the supplier receives funds without running a card.
The model isn't specific to one network. American Express calls its version Buyer Initiated Payments, Visa has used the name Straight Through Processing, and Mastercard has offered a related supplier-choice service.
Who initiates the payment doesn't remove card acceptance costs. The supplier still pays interchange through its processor.
BIP fits high-volume suppliers that already accept cards but resist processing them by hand. Small or occasional suppliers are often better on ACH.
The hardest part of any card program is supplier enrollment, and that work doesn't change much between the two models.
What is a buyer-initiated payment?
A buyer-initiated payment is a card payment in which the buyer starts the transaction instead of the supplier. Once the buyer approves an invoice, its card program sends the payment to an enrolled supplier, and the supplier never handles a card number.
American Express describes the flow on its Buyer Initiated Payments page, and it reduces to five steps:
The buyer approves a supplier invoice in its own AP process.
The buyer submits a payment instructions file to the card issuer.
The issuer pays the enrolled supplier directly.
The supplier records the receipt against the open invoice.
The buyer settles the card balance at the end of its billing cycle.
Steps 2 and 3 are the whole difference. In a supplier-initiated flow, the supplier receives card details and runs the charge itself, the way most B2B virtual card payments still work today.
What is the American Express BIP program?
American Express Buyer Initiated Payments is Amex's branded version of this model. Amex describes BIP as an electronic payment method in which the buyer submits a payment instructions file after invoice approval, Amex pays the supplier directly, and the buyer settles at the end of its billing cycle.
Amex also says BIP can extend days payable outstanding by 14 days. That's Amex's own figure for its own product, and the real effect depends on where invoices land in the billing cycle. Amex runs a Supplier Enablement Team to help suppliers start accepting BIP, which tells you where the effort in these programs goes.
What is straight-through processing for card payments?
Straight-through processing is Visa's name for a buyer-initiated commercial card payment. When Visa and Billtrust announced it in an October 2017 press release, Visa described Straight Through Processing as a service that "enables a participating issuer's buyer to initiate" a Visa commercial credit transaction, including from accounting software.
Mastercard approached the same problem from the supplier's side. Its Track Business Payment Service, launched in the U.S. in May 2020, lets suppliers choose how they're paid by buyer and invoice, across card and account-to-account payments. Product names in this space change often, so read these as dated definitions. What the three programs share is the idea that the buyer's system should start the payment.
How is a buyer-initiated payment different from a supplier-initiated card payment?
The difference is who triggers the charge. In a buyer-initiated payment, the buyer's instructions move the money and the supplier receives it. In a supplier-initiated card payment, the buyer sends card details and the supplier processes the charge through its own merchant account.
Factor | Buyer-initiated payment | Supplier-initiated card payment |
Who starts the payment | Buyer's card program, after invoice approval | Supplier, after receiving card details |
Card number exposure | Supplier never sees or stores a number | Number sent by email or portal, then entered |
Supplier steps per invoice | Record the receipt | Retrieve the card, run the charge, match remittance |
Remittance | Travels with the payment instruction | Often sent separately from the card details |
Enrollment | Supplier enrolls in the specific network program | Supplier only needs to accept cards |
Supplier fees | Interchange still applies | Interchange applies |
Buyer reconciliation | Payment file ties to approved invoices | Charges matched to invoices after posting |
Source: American Express BIP description, Visa interchange schedule, and general card program practice.
Read across the table and the trade is clear. The buyer-initiated model moves work off the supplier's desk and puts a one-time enrollment step in its place.
What changes for the buyer?
The buyer controls the payment date. A supplier-initiated charge posts whenever the supplier gets around to running it, which can be the same afternoon or three weeks later, and that drift makes cash forecasting harder than it should be. With a buyer-initiated payment, money goes out on the day the buyer's instruction file says it does.
The card itself still carries the fraud advantage over paper. According to AFP's 2025 Payments Fraud and Control Survey Report: Key Highlights, 5% of organizations saw attempted or actual virtual card fraud in 2024, against 63% for checks. Pushing payments also avoids collecting and storing supplier bank details, which matters because bank-detail change requests are a favorite route for business email compromise. The FBI's 2025 Internet Crime Report put reported business email compromise losses at $3,046,598,558 for 2025. A single-use virtual card issued for one invoice gives a fraudster very little to redirect. Corpay pays suppliers by virtual card, ACH, or check from one approval flow, so a supplier that declines card still gets paid on schedule.
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What changes for the supplier?
The supplier stops processing cards by hand. Payments arrive already tied to the invoice, so the AR clerk's day changes from typing card numbers and chasing remittance emails to posting receipts.
I've watched an AR team try to apply a single $4,812.37 card charge that covered three invoices, with the remittance sitting in a different inbox from the card email. The charge cleared in a minute, and the matching took most of an afternoon. That's the work buyer-initiated payments remove.
What doesn't change is the cost of acceptance. The supplier still pays interchange through its processor, and it has to enroll in the buyer's specific program before the first payment arrives. In return, suppliers that accept cards report a working capital benefit. According to Mastercard's May 2025 commercial card acceptance research, conducted with The Harris Poll among 1,042 respondents globally, card-accepting suppliers are 14 percentage points more likely to say they're very efficient at maximizing working capital.
If you're planning which suppliers to approach first, pull your top 50 suppliers by annual spend and mark which ones already take cards. That short list is usually where a buyer-initiated program pays off fastest.
Do suppliers pay more to accept buyer-initiated card payments?
No, and they don't pay less either, at least not because of who initiates the payment. Acceptance costs come from interchange and from the supplier's own processor, and both apply whether the supplier runs the card or the buyer pushes the payment.
Visa's interchange schedule shows the scale. According to Visa's 2026 Visa USA Interchange Reimbursement Fees, effective April 18, 2026, supplier interchange on Visa commercial cards is 2.70% plus $0.10 card-not-present and 1.30% plus $35 at the large-ticket rate. By my arithmetic, a $10,000 invoice costs the supplier $270.10 at the card-not-present rate and $165 at the large-ticket rate, before the processor's markup. Those rates diverge fast as invoices grow, so card data quality and transaction size matter more to a supplier than the payment's direction.
Some descriptions of buyer-initiated programs imply suppliers escape card fees. They don't, and a supplier that's told otherwise will feel misled when the first statement arrives. An honest pitch offers faster, predictable payment with no manual card entry, at roughly the cost of the card acceptance they already have. Suppliers weighing that trade usually want to see the supplier's side of virtual card acceptance, and passing richer Level 2 and Level 3 card data can qualify some transactions for lower rates. The buyer's economics run the other direction, since the same interchange is what funds card rebates.
When should you use buyer-initiated payments, and when not?
Use buyer-initiated payments for high-volume suppliers that already accept cards but resist processing them manually. Skip them for small or occasional suppliers, where enrollment costs more effort than it saves, and for suppliers that will only accept ACH.
A workable rule sorts suppliers into four groups.
Suppliers you pay many times a month that accept cards and complain about card handling or remittance are the strongest fit.
Large suppliers that accept cards but push back on fees can work, if Level 3 data or invoice size brings their effective rate down.
Suppliers you pay a few times a year rarely justify the enrollment work.
Suppliers with thin margins that refuse card acceptance outright belong on ACH.
ACH is the default for that last group, and it's growing. According to Nacha's January 2026 announcement on ACH Network volume in 2025, the network carried about 8.1 billion B2B payments in 2025, up about 10%. Checks keep shrinking. The Federal Reserve's commercial check collection data shows checks collected through the Fed fell 6.1% in 2025, to 2,796 million. Paper is expensive to send, with AFP's 2022 Payments Cost Benchmarking Survey putting the median cost of issuing a check at $2 to $4, a figure that's now four years old and probably higher today. Paper is also riskier, since Executive Order 14247, issued by the White House in March 2025, says Treasury checks are 16 times more likely than electronic transfers to be reported lost, stolen, undeliverable, or altered.
My position is that the payment model is the smaller decision. A buyer-initiated program with nobody assigned to enroll suppliers will stall at a dozen vendors, while a supplier-initiated program with disciplined enrollment can move most of a supplier base off checks. Visa's own Fiscal 2025 Annual Report says Visa holds roughly two of every five commercial card payments and is expanding into virtual cards for supplier payments, so the networks clearly expect more of this spend to move to cards. Whether your share of it moves comes down to enrollment.
What does supplier enrollment involve?
Supplier enrollment is the outreach and setup that gets a supplier to accept your chosen payment method. For a buyer-initiated program, it means signing the supplier up for the specific network program, confirming where funds land, and agreeing how remittance will arrive.
In practice, an enrollment effort runs through a predictable sequence:
Segment suppliers by spend, payment frequency, and current card acceptance.
Contact the supplier's AR team as well as the sales rep who owns the account.
Explain the payment timing and the acceptance cost plainly, including interchange.
Complete the network program's enrollment and confirm remittance format.
Follow up on the first two or three payments to catch posting problems early.
Most programs underestimate step 5. A supplier that can't match the first payment will call your AP team, and if that call goes badly, they'll ask to go back to checks. Card networks and providers run supplier enablement teams for exactly this reason, and the vendor enrollment practices that work for virtual cards generally apply to buyer-initiated programs as well. Aligning enrollment with your business payment terms also helps, because a supplier offered faster payment on card has a concrete reason to say yes. With Corpay's fully managed AP, supplier enrollment is part of the service, and most clients are live in weeks.
Pay suppliers by card, ACH, or check with Corpay
Most buyers who look into buyer-initiated payments are really trying to solve the enrollment problem. They want more suppliers on card, fewer checks, and less manual work on both sides, without running a supplier outreach campaign themselves.
Corpay's fully managed AP takes that work off your team. Corpay enrolls your suppliers and pays each one by virtual card, ACH, or check from one workflow, using single-use virtual cards for card payments. Card spend earns rebates, and Corpay pays its customers more than $800M in virtual card rebates every year. With Corpay AP automation, AP teams save about 40% of the time they spend on processing, and the platform connects through 100+ ERP integrations, including NetSuite, Sage Intacct, Microsoft Dynamics 365 Business Central, and Acumatica. Most customers are live in weeks.
Frequently Asked Questions
What does buyer-initiated payment mean?
A buyer-initiated payment is a payment the buyer starts and pushes to the supplier, instead of the supplier pulling it by running a card. In card programs, it means the issuer pays the enrolled supplier from the buyer's instructions, with no card number for the supplier to enter.
Is BIP the same as a virtual card payment?
Not quite. Both run on card networks, but a standard virtual card payment is usually supplier-initiated, since the supplier receives a card number and processes the charge. BIP sends the payment to the supplier directly, so the supplier never handles a card number.
Do suppliers pay fees on buyer-initiated payments?
Yes. Suppliers pay interchange and processor fees on buyer-initiated card payments, much as they do on cards they run themselves. Who initiates the payment doesn't remove acceptance costs, though richer transaction data and larger invoice sizes can lower the effective rate on some transactions.
Does BIP extend payment terms?
It can extend the buyer's float. The supplier is paid on the payment date, while the buyer settles the card balance at the end of its billing cycle. American Express cites a 14-day DPO extension for its own program, and actual results depend on billing-cycle timing.
What is straight-through processing?
For card payments, straight-through processing is Visa's term for a buyer-initiated commercial card transaction. The buyer starts the payment from its own system, sometimes directly from accounting software, and the supplier receives funds without manually processing a card.
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