In December 2008 PayPal Merchant Services went live with an automated e-invoicing application for the UK business community, developed in partnership with electronic invoicing outfit OB10.
Under the partnership, invoices sent by PDF will incorporate a PayPal button which the customer just clicks to arrange payment. The payments can then be made by credit and debit cards, bank transfers or PayPal balance, meaning customers don't have to wait for cheques to clear.
The cheque remains a popular payment method within the SME business-to-business sector. As the majority of SME's still pay by cheque in the UK, this product is targeted particularly to large suppliers that have many small buyers.
The PayPal-OB10 partnership - initially for the UK market only - aims to help small businesses reduce the time it takes to send invoices to all of their customers, enabling them to process invoices more quickly.
Finextra verdict: Anything that helps reduce the cost and environmental impact of paper invoicing, and moves small businesses to electronic payment channels rather than cheques, is a good thing for the economy. By targeting the SME sector OB10 and PayPal could help generate a grass-roots move to e-invoicing to complement some of the top-down European initiatives.