How Can B2B Payments Catch Up with Consumer? Next Generation Solution is B2B Integrated Payables

How Can B2B Payments Catch Up with Consumer? Next Generation Solution is B2B Integrated Payables

Mark Riess
Vice President, Strategic Partnerships
Priority Commercial Payments

In the world of payments, consumers – once again – teach us the first lesson about user experience: If it’s not simple,  you’ve lost.

People now avoid handling cash and many younger people have never written or deposited a check. Consumer payments are touchless, clear quickly and deliver transaction data almost instantly. Consumers expect to be rewarded with points and cash back.

From a B2B payments perspective, the typical five-to-seven-year lag behind consumer is simply not acceptable – or necessary – today. Far too many financial institutions and corporate finance departments maintain the mindset that B2B payments are too complex and are slow to adopt technology to make the process faster and less labor-intensive.

In fact, fintech partnerships with middle-market banks are accelerating innovation and delivering Integrated Payables (IP) solutions for paying suppliers seamlessly, with low touch and simple execution along with rich invoice and purchase order data.

To accelerate this IP payments revolution, four essential questions need to be addressed:

  1. Aren’t B2B payments too complicated? We recognize that commercial buyers and suppliers need a greater level of flexibility in payment types and terms, seamless integration and rich data. With IP, the rich data shared between buyer and supplier – invoice number, payment amount, purchase orders details, and more – can be easily imported into both ERP systems instead of manually entering data. Buyers should be able to upload one simple payment instruction file and have all payment options executed through that one file. A “true” IP platform makes payments very simple.
  2. How can Integrated Payables make life better for buyers and suppliers? There is a strong business case for delivering value to both buyers and suppliers. Typically, an AP solution consists of issuing virtual cards. However, most solutions don’t factor in any other payable methods that drive additional value, like buyer-initiated payments (BIP), ACH+ and dynamic discounting, along with simple ACH and check. These payment types offer opportunities to not only streamline — but monetize — a buyer’s AP through a revenue share with the fintech and their end user customers. Life is better because we can make it very simple to monetize accounts payable with little to no investment of time, money or technology resources on the buyer’s part.
  3. Are suppliers really willing to get paid like this? Suppliers are strapped for cash and need to be paid as quickly as possible. Many suppliers today are willing to receive payment quicker from their strategic clients for a small fee. The right payment strategy allows the supplier to be paid sooner with good funds, while the buyer receives a rebate. For those who want to stay with check and simple ACH, an IP platform can still improve the level of security and data delivered for both buyer and supplier using these methods.
  4. How will fintech partnerships help B2B payments catch up with consumer payments? Fintechs are partnering in creative ways to deepen their value proposition. Many AP automation solutions do a great job of streamlining invoice workflow within ERP systems, but the payments piece is missing. These solutions fail to go the “last mile” to deliver payments and rich transaction data. The game-changer is the IP solution that works with any ERP and accepts a single payment instruction file to allow numerous forms of payments to flow seamlessly to suppliers. When the platform also includes best-in-class supplier enablement and activation, the solution moves the needle on lower cost and new revenue in the form of rebates.

Be Bold and Share What You Know

Before joining Priority Commercial Payments, I worked directly with corporate banking customers as end users of payment products. I enjoyed the satisfaction of helping them simplify their accounts payable process, generate new cash flow from rebates and free up their team to focus on their core business with Priority Commercial Payments Exchange (CPX).

Now, I work to deliver solutions on a much broader scale, partnering with other fintechs to integrate CPX as their back-end payments solution. Talking to fintechs daily makes it clear that they are hungry for the next generation solution of B2B integrated payables that will make the business user’s life simpler and their experience better.

Drax from Guardians of the Galaxy says, “Modesty, I like it. I, too, am extraordinarily humble.” There is more than a little irony in bragging about being humble. But as fintechs, we have to be bold in sharing what we know.

B2B payments will catch up faster with the consumer payment experience if we partner in innovation.

Check out our short video. Then, let’s talk about working together to make the commercial customer experience better and life simpler – sooner.