B2B Payments

Faster Payments For Corporates Begin To Simmer

With the payments acceleration trend of recent years promising disruption in peer-to-peer (P2P) payments, these initiatives were viewed only in the context of consumer payments at first.

While the jury is still out on exactly how faster and real-time payment efforts will effect corporate payments, 2018 resulted in new products and services that promise speed for business-to-business (B2B) payments. Below, PYMNTS rounds up the top stories of the year that shed light on faster payments’ plans for business payers.

Businesses Offered The Option Of Speed

It may have been unexpected, but in a BNY Mellon report published this year, 29 percent of surveyed executives said real-time payments will have a high impact on their companies in the coming three years. The survey (though with a small response pool) signals that businesses are indeed interested in, or at least paying attention to, faster payments initiatives.

One of the biggest players in faster payments today is SWIFT, which recently touted the spread of its global payments innovation (gpi) initiative. Earlier this month, SWIFT announced that gpi which has emerged as a service-of-choice for cross-border corporate transactions is now used in the majority of cross-border payments traffic, with 100 percent of those transactions made within 24 hours (and half made within 30 minutes).

Citizens Bank also made inroads in faster B2B payments this year, announcing plans to launch real-time payment capabilities for companies starting in 2019.

Some of the faster corporate payment initiatives that were developed this past year saw blockchain at the heart of their infrastructures. Earlier this month, Signature Bank rolled out its real-time corporate payments offering, for example, which uses blockchain technology from Signature’s partner, trueDigital Holdings. The service will go live on Jan. 1, 2019.

One of the most promising use cases for faster corporate payments is in the area of payroll.

Some industry players noted that payroll cards can bridge employees  particularly underbanked professionals  to their wages in real time. For instance, Kittrell Paycard launched a faster payroll solution this year in the form of InstantWage, a way for payroll card users to access wages before payday.

Another payroll company that took advantage of faster payments functionality this year included Earnin, which enables real-time payroll payments with a vision of leaving the biweekly paycheck schedule behind.

It’s not altogether unsurprising that payroll has surfaced as a top target of faster payment innovators: As the industry headed into 2018, payroll startup Wagepoint spoke with PYMNTS about the opportunity.

“That’s probably the number-one request we get, when we’re asked, ‘Is there anything you can do about turnaround time of ACH?’” said Wagepoint CEO Shrad Rao in a PYMNTS interview.

Doubt Still Shines

Despite the newest services that promise faster corporate payments, the industry is still doubtful over whether speed is truly vital for businesses.

“When it comes to B2B, payment speed is important, but only to a point,” said B2B Pay Founder and CEO Neil Ambikar in an interview with PYMNTS earlier this month.

While the end of last year raised new doubts over B2B’s place in a faster payments world (NACHA data revealed just 6 percent of Same Day ACH payments were B2B transactions), this year uncovered payment service providers’ and banks’ own doubts over how to introduce speed for their business clients.

In June, researchers from Aite Group found financial institutions (FIs) are struggling to reach a consensus on how to offer faster payment capabilities for businesses, particularly when it comes to cutoff times and fees.

“It’s a lot more than just saying, ‘I’m now going to offer this.’ There’s legal, there’s risk, there’s compliance, there’s operations, there’s implementation, there’s so many aspects,” said Aite Group Senior Analyst Erika Baumann in an interview with reporters at the time. “At this point, banks have to get away from the high-level strategy, to start actually digging in, learning from the early adopters and, as an industry, coming together to ramp up that volume.”


Exclusive PYMNTS Study: 

The Future Of Unattended Retail Report: Vending As The New Contextual Commerce, a PYMNTS and USA Technologies collaboration, details the findings from a survey of 2,325 U.S. consumers about their experiences with shopping via unattended retail channels and their interest in using them going forward.