Now that B2B payments processes can benefit from sophisticated technology, corporations are tasked with choosing exactly which technologies to integrate. It can make the lives of executives in charge of IT procurement, accounts payable and other departments a challenge, and that’s where an advisory team like Levvel comes in.
To date, Levvel has provided IT consulting services to corporations largely in the retail and banking side of payments. But the company has announced the acquisition of PayStream Advisors, another advisory and research firm that Levvel Payments Practice Lead Scott Harkey said will guide the consulting firm into the world of B2B payments technology.
That means now, when Levvel offers advice on how a company should integrate B2B payments technology, it can do so with hard data provided by researchers at PayStream to back up its suggestions.
“We realized a lot of the companies we worked with — both in the payments space in the retail side, which is where we had really been focused, as well as the B2B side — were looking at the PayStream research and using it as a barometer to make product decisions,” Harkey explained in an interview with PYMNTS.
Guiding The Customer
Research can provide another set of ammunition when guiding a corporation towards more automated B2B payments tools or in helping to decide which features a firm needs when choosing procure-to-pay or accounts payable solutions.
“The challenge as a consulting firm is we go to a company and talk about how we can help or make suggestions of products,” Harkey explained. “It can often come across as, this is our perspective.”
While it’s true that consulting companies will suggest what they believe to be the best solution for their corporate clients based on things like industry trends and demand from industry competitors, Harkey said it’s easier to make a solid argument when research and data are involved.
It can also steer a corporation away from either developing solutions (if they’re a FinTech company) or integrating solutions that may seem beneficial but that the empirical evidence suggests otherwise. Harkey offered the example of certain receipt capture and management solutions that, in reality, aren’t necessarily in high demand among corporate clients.
The research has “tremendous influence,” especially in such a niche and highly competitive industry as B2B payments, the executive noted.
PayStream Advisors Research Director Jimmy LeFever agreed that it can be difficult for corporations to change their ways when it comes to accounts payable, procure-to-pay and other B2B payments tools — even with research.
“I think that it’s probably an ‘if it isn’t broke, don’t fix it’ mentality,” he said. But, LeFever added, one of the biggest barriers to adoption of these technologies is a lack of education, a gap which research can fill.
“There is still a small percentage of companies out there that are at the base level,” he said. “They need education.”
Guiding The Industry
Having a trove of researchers in your arsenal can also help in the process of guiding the development of the B2B payments industry, too. With access to data on industry trends and customer demand, the executives said, advisory firms can lead payments providers and other FinTech firms on how to stay competitive.
According to LeFever, that competition is stronger than ever.
“There are a lot of partnerships between payments providers, corporate payment management providers and procure-to-pay solutions,” he said, reflecting on current market trends. “That’s been the hottest trend lately.”
A few years ago, he said, virtual cards were the big deal in B2B payments. Today, though, LeFever said he believes companies have reached maximum adoption of v-cards in terms of having their suppliers accept this form of payment.
He estimates that between 30 and 40 percent of corporate suppliers accept virtual cards. With businesses looking to push that acceptance rate further, they’re examining new incentives and value-added services, coupling a virtual card tool with features like invoice and cash flow management.
“They’re realizing that, lately, the way to get more customers is to be a value-add service on top of procure-to-pay,” he stated. It’s bringing eInvoicing and eProcurement companies in close quarters with payments automation firms.
Harkey added that there’s been some market consolidation in the space, too, adding to the competitive fire and adding to the list of options that corporations have to choose from when implementing these offerings.
By offering services that the data proves is in demand, FinTech players may actually accelerate the adoption of B2B payments innovations. It’s a tall order, especially when there is still reluctance to integrate these technologies despite the evidence that supports doing so.
Harkey said it probably has to do with a reluctance to invest in change. But today, he said, they don’t have much of a choice.
“Large companies need to be able to adapt and change the way they’re operating,” he said. “That’s not just a technology problem; it’s a whole operational problem. They need to change the way they look at things. And they need to restructure very core systems.”
The acquisition of PayStream, he added, will aim to not only provide corporations with the evidence they need to be convinced that it’s time to adopt B2B payments change but to provide them the tools to actually implement that process.