B2B’s Summer Of Faster, Integrated Payments

online payments

For B2B payments, this summer was a season of technological progress.

Both buyers and suppliers say they are looking forward to adopting technology that can tackle their biggest accounts payable (AP) and accounts receivable pain points, with PYMNTS’ July Payables Friction Playbook, a collaboration with Corcentric, finding that 42.6 percent of AP professionals say they already receive invoices via an eInvoice solution. More than one-tenth added that they pay their suppliers using a digital wallet, and nearly half (44.5 percent) express satisfaction with using virtual cards to settle invoices.

In another collaboration with Mastercard this summer, the PYMNTS B2B Payments Automation Innovation Playbook similarly revealed that the demand for AP automation is on the rise.

However, as the Playbook revealed, the majority of surveyed businesses have yet to adopt AP automation.

As companies explore the opportunity, financial service providers took steps this summer to encourage the shift. Faster payment initiatives, a focus on application programming interfaces (APIs) and data integrations and efforts to elevate traditional B2B payment tools like ACH and commercial cards all made waves this summer.

From the Fed’s faster payments announcement to the launch of Visa B2B Connect, PYMNTS looks back at some of the biggest B2B payment stories of the season.

Faster Payments

The Federal Reserve ignited a bit of chatter when it announced in early August its plan to roll out an instant payment system in the U.S. While the debate continues as to whether the Fed’s service will help or harm the nation’s faster payments adoption, what’s clear about the regulator’s plan is that the country is indeed quickly moving toward real-time payments — and commercial transactions cannot be left behind.

The Fed’s efforts are the latest in a string of service providers looking to accelerate ACH transactions, though according to challenger bank Novo, businesses will struggle to shift their mindset into looking at ACH as a faster payment vehicle.

“People don’t know what ACH is, and people don’t know what their options are,” Novo Co-Founder Tyler McIntyre told PYMNTS in June. “When they need to move money same-day or next-day, their minds go straight to wire.”

Though some critics may say corporates are too stuck in their ways to adopt faster payments, PaySett Founder and CEO Benny Cooley recently told PYMNTS that businesses’ back-office systems are actually in a favorable position to seamlessly adopt faster payment technologies and operations.

“The transition from batch to real-time will occur faster because the technology has progressed rapidly to allow for real-time processing,” he said.

Elevating the Commercial Card

Another major proponent of faster B2B payments is Visa, which took a significant step forward in this initiative with the launch of Visa B2B Connect in June.

Not only does the solution aim to accelerate commercial transactions, but the tool is hoping to elevate the commercial card and enable payments on “a brand new network [built] from scratch,” according to Visa Head of Global Business Solutions Kevin Phalen.

“We did not build this infrastructure by adding to the traditional card network infrastructure as we knew it,” he told PYMNTS’ Karen Webster at the time.

Visa wasn’t the only player to explore the role of the commercial card in a modern B2B payments ecosystem.

Earlier this month Emburse Co-Founder Roger Gu told PYMNTS about the opportunity to elevate the role of the traditional p-card to combat issues like employee fraud and overspending.

“We always thought it made more sense to do things before money is spent, before an employee is on the hook,” he said. “Technology didn’t historically allow for that.”

It does today, thanks to the emergence of the virtual card in commercial transactions. Virtual commercial card technology allows for real-time data capture and analysis, a key benefit for corporates looking to strengthen their spend strategies.

However, beyond simply digitizing commercial cards and their transactional data, Boost Payment Solutions CEO Dean M. Leavitt also talked with Karen Webster this summer about the importance of localizing commercial card payments — even those made across borders — to promote vendor acceptance, one of the largest barriers to commercial and virtual card adoption.

“The way we try to set it up, whenever possible, is to have every transaction essentially operate as a domestic transaction,” he explained after Boost announced a $12 million funding round and an expansion beyond North American market.

APIs and Data Integration

Of course, cards aren’t the only corporate payment tool able to digitize transactions and transactional data. This summer, industry players continued to ramp up their integration efforts, embracing API technology to not only make a payment digital, but to imbed that transactional process directly within other back-office processes for other buyers and suppliers.

With open banking in full swing in Europe and the U.K., the U.S. this summer saw more gradual steps toward embracing open banking, with many in the financial services space expecting this trend to have a significant impact on corporate and small business FinServ.

APIs are also important in B2B commerce, particularly when it comes to syncing corporate buyers’ and suppliers’ systems so everyone is on the same page from procurement to payment — and, as Convictional Co-Founder and Chief Operating Officer Chris Grouchy explained, to getting both sides of a B2B transaction on a level playing field.