The trouble with working though the early days of a paradigm shift is that it can be very hard to say what the shape of things to come will be. Luckily for Transactis CEO and Chairman Joe Proto, he’s worked in B2B payments for the last 30 years and for almost the last 20 B2B payments has been on the verge of a paradigm shift away from paper.
A shift that seems to never quite ignite, Proto told MPD CEO Karen Webster in a recent podcast interview, because of an essential asymmetry in how businesses look at paying each other.
“In a lot of business, it comes down to ‘I want to pay you via paper, but I want you to pay me via electronic.’ The controller of my company might want to send cut checks but she also wants to be paid electronically and it doesn’t work that way. It’s a zero sum game if that’s the way it continues to play out.”
Proto also told Webster that while it is easy to wait for the slowness of the B2B marketplace to change, that’s going to be a very slow change because of inertia—people aren’t changing merely because businesses don’t like change. To whatever degree that is true, it still fails to capture the true problem—a change in payments method must be accompanied by tangible benefits.
“If the solutions were compelling enough and the replacement of paper offered enough advantages and benefits and it was feature and function rich to give up paper, you would see, and we’re seeing now, paper give up it’s stronghold.”
That valued add, according to Proto, comes in the form of businesses like Transactis offering other businesses an option to tie into a payments platform that is technologically advanced without having to entirely repurpose IT. When IT limitations stop being payments limitations, Proto told Webster, a whole new world of decision-making ability open up.
“Finance and accounting can drive a decision that is not held back by their internal IT resources.”
Proto also noted that this isn’t a swipe against IT departments that are already tasked with growing revenue, providing data security and making sure businesses on the whole are successful.
So who will be the great “Apple” or “Uber”- like disruptor to stride onto the B2B payments field and change the way the game is played?
Proto told Webster he didn’t think that this was precisely how it would work in B2B and that the market is in fact large enough to support several different runs at finally wrestling the paper problem to the ground.
However, he also noted, there are key things to look for when looking at the types of outside innovation that could disrupt B2B, particularly when it comes to businesses that help other businesses preserve their marketplace of choices.
“We’ve all talked about getting rid of our cards and our plastic and it hasn’t happened. I guarantee you if you go on on a business trip, you are going to have cash in your wallet. Americans are addicted to choice and we never give up a payment method once we have it.”
For Proto, the Uber-like experience that B2B is waiting to be disrupted by is the one that lets consumers pay with what they want to pay with so that every choice a manager has as a consumer is that he/she also has as a corporate buyer. Moreover, businesses need to be able to see the payment details that go with those optimized payments.
Most important, Proto told Webster, is to keep in mind that when it comes to innovating a space like B2B, the only rule is change.
“Nothing is sacred. It’s Election Day every day.”
To hear more from Proto and the innovators who are using new tools and technologies to transform the B2B payments space, join us on October 15th in New York to discuss “What’s Next in B2B Payments?”Register today!