B2B payments may not be the prime target for faster and real-time payments technologies, but that doesn't mean there isn't a place for accelerated transaction capabilities in the corporate treasury department.
Statistics released by NACHA revealed that, following the rollout of same-day ACH in the U.S., the vast majority of uptake of the feature occurred among consumer and peer-to-peer transactions: Only 6 percent of same-day ACH activity in the first 11 days of its rollout were B2B.
In a recent interview with PYMNTS, B2B Pay founder and CEO Neil Ambikar explained that faster payments are only part of the equation of improving corporate transactions.
“When it comes to B2B, payment speed is important, but only to a point,” he said. “It’s the whole package that needs to be changed and accelerated. A small business needs working capital, letters of credit, export insurance logistics, shipping insurance and credit protection. This whole area is fragmented, archaic and very costly. Faster and cheaper payments are just the top of the changes we need.”
New data from TD Bank finds that corporate treasurers are, indeed, focusing on priorities other than speed when it comes to enhancing their organizations’ payments processes.
Its latest report, “2017 Treasury Perspectives,” developed alongside Strategic Treasurer, assessed the opinions of banks and corporate treasurer professionals around the world. About 80 percent of the more than 300 respondents were corporate treasury professionals, while the remaining 20 percent were banking professionals.
The report revealed that, when it comes to inbound transactions, most treasurers surveyed said the ability to post more payments data is more important than the speed of settlement of a payment. More than a third (36 percent), however, agreed that speed was most important.
Surveyed banking professionals agreed that payments data is more important than speed for inbound payment processing (55 percent versus 45 percent), though most banks (61 percent) said they are ready to deploy faster payment capabilities for their corporate customers today.
According to TD Bank’s head of treasury management sales, Tom Gregory, the importance of payments data is clear for both corporate treasurers and corporate bankers.
“Rich data attached to payment files makes the jobs of both bankers and corporate professionals easier, so it is not surprising that so many respondents view this as vital to running more efficient operations,” he said in a statement.
Treasurers Talk Tech
TD Bank and Strategic Treasurer also inquired about corporate treasurers’ and bankers’ expectations for various financial services technologies.
Analysts concluded that four times as many treasurers agree APIs are more important than blockchain technologies for outbound payments, while six times as many bankers said the same.
Treasurers and bankers are not in complete alignment, however. More than three-quarters of corporate bankers say the development of mobile corporate banking tools will be significant in the coming years, while only about a quarter of treasurers rated mobile banking apps as a high priority. Nearly a fifth even said that mobile apps are unimportant for their organizations.
Where these professionals do find common ground is in security, but, according to Strategic Treasurer managing partner Craig Jeffery, businesses continue to lag in their security strategies.
“The current situation represents a massive incongruity,” he said in a statement. “We see great concern about fraud, but only a small portion of companies currently train and test their employees on security. Much greater diligence is required on this front to close the gap.”
Ninety-two percent of banks (and 74 percent of corporates) agreed that cyberfraud is their number-one concern for 2018; corporate treasurers’ expectations for payments innovation largely focus on security.
Yet analysts found that only 39 percent of companies require employee training for professionals involved with payment processes, compared with 97 percent of banks that say their professionals are required to undergo cybersecurity training.