The movement to bring B2B payments beyond paper checks can be a glacial one. Technology has been improving to help firms, especially smaller ones, streamline the way they pay components of their supply chain and get paid as well. The positive impact of faster payments is, of course, better cash flow management.
But all migrations have costs attached. Put aside the fact that corporate culture can be sticky, and some firms do things the way they do things, because, well, things have always been done that way. There’s also a cost of transitioning to new technology, with the initial outlays of paying for technology and then, of course, learning to use it.
Two companies recently announced a collaboration to help speed SMEs to embrace electronic payments. PayStand, a B2B payments company, and ONE UP, which offers financial apps, said last week that ONE UP is adding PayStand’s payments functionality to its platforms, which run the gamut from accounting to invoicing to inventory management.
PayStand Chief Executive Officer Jeremy Almond told PYMNTS in an interview that the addition of its payments functions through online transactions means that ONE UP’s roster of more than 335,000 enterprise clients now have an intuitive, faster way to pay invoices, in a relationship where ONE UP gets payments functionalities without having to build them out on its own.
As has been reported, firms can add “Pay Now” buttons to invoices that are sent via ONE UP. There’s a two-tiered B2B payments service offered through ONE UP, with a “starter” plan that does not have any fees and a “standard” plan that has a $10 monthly charge but which allows for the acceptance of credit cards for B2B payments, with a 2.49 percent rate.
“B2B payments have been lagging the innovations that have been seen in the consumer space,” Almond told PYMNTS. “It still blows some people’s minds when they hear about just how payments, in the United States, still depend on checks.” His firm’s approach, he said, has been to find ways to solve that problem of reliance on checks, especially among SMEs. Among areas ripe for improvement: invoicing and accounts receivables management, where, even within the confines of, say, a traditional net 30 payments contract, a check can be issued at the tail end of that period and wend its way through the mail, arriving at some later date and having a negative impact on cash flow.
With the “click” function tied to invoices and the back-office functions that serve ONE UP clients, said Almond, it becomes easier to match the payments to the business terms of the actual agreements, and as a result, he added, firms “reduce friction in the payments process … through an Uber-like experience.”
The payment options themselves include cards (as mentioned above) and also eChecks. Card purchases, said Almond, “have their place in B2B” but tend to be limited to smaller outlays that “are low-cost or one-off transactions.”
One possibility — though Almond said it would be a “longer way out” in terms of timeframe — might be to include blockchain as a conduit for virtual payments.