Categories: B2B Payments

Mobile Payment Terminals Get B2B-Ready

Square‘s mobile card reader undoubtedly made a significant impact on the mobile point-of-sale (mPOS) market, and kick-started a slew of recent innovations to broaden the ability for small to medium businesses (SMBs) to accept payments just about anywhere.

However, mom-and-pop shops and small kiosks selling to consumers aren’t the only kinds of companies in need of mobile payment-acceptance technology. Increasingly, business-to-business (B2B) companies working in the field and along supply chains are servicing their corporate customers, and seeking ways to accept payment upon delivery of goods and services.

Technologies like those developed by Square offer ease-of-use and convenience for both buyer and seller, benefits that B2B businesses are seeking as well. Yet, as Tony Horling, founder and CEO of InTu Mobility, recently told PYMNTS, mPOS technologies designed for business-to-consumer (B2C) payments won’t cut it for multibillion-dollar enterprises that need to accept B2B payments in the field.

“When you have a business servicing another business, you need a system that is enterprise-ready, and robust enough to facilitate a transaction,” he said, noting that while technologies like Square succeed in the B2C payment context, they’re not designed to address the needs of the B2B context.

What B2B Businesses Need

Historically, when in-field service workers, delivery drivers or other B2B service professionals complete a task with a client, those companies issue an invoice via email or snail mail, and wait to get paid. This has obvious drawbacks, and the immediate benefit of a mobile payment acceptance solution is accelerated receivables and cash flow.

“This is about being able to recognize their revenue and accounts receivable faster and more securely,” he said, “and give them the opportunity to not have a legacy system in place for accounts receivable, where you send out a bill.”

However, there are more value-adds for B2B businesses, including the ability to mitigate the risk of nonpayment. A company may require full or partial payment upon delivery of perishable goods, for example, because once those goods go bad, a seller will not be able to recover that inventory in the case of nonpayment.

These companies have additional requirements in their payment and accounts receivable operations that cannot be met by traditional mPOS technologies designed for B2C payments. Horling pointed to the security and compliance of in-field payment acceptance, for instance, as corporates must be reassured that transactions will be tax-compliant, and that customer data will remain protected and unavailable to data aggregators or scrapers.

These are the functionalities that InTu Mobility kept in mind when it decided to collaborate with receivables solution provider FTNI to launch its integrated receivables capability. Horling said that one of the greatest benefits of collaborating with FTNI is its ability to ensure that transaction data is integrated into customers’ back-office accounting platforms and other portals — another key demand of B2B businesses.

Benefits For Payers

Among the many ways that B2B payments are different from B2C payments is the practice of payment terms. A service provider’s ability to get paid at the time a job is completed has obvious benefits for that provider. Yet, for the end customer, waiting to receive a bill in the mail, and sending out a check based on agreed-upon payment terms, is a strategic way to float capital for as long as possible.

However, Horling explained that in-field payments have significant benefits for the end customer as well.

“Taking mobile payments allows you to have advantages, so if you can pass those advantages on to your customer, that means savings for you and for your customer,” he explained.

Horling pointed to early payment discounts and other benefits that a seller can offer a customer for immediate payment. Furthermore, he emphasized, accepting in-field payments does not negate businesses’ payment-term agreements. Oftentimes, B2B firms will require at least partial payment, either before or upon completion of a job, with the companies agreeing that goods will not be released to the buyer until that transaction has occurred. Enterprise-ready payment-acceptance technology also means being able to accept not only cards, but ACH, cash and other payment methods, enabling choice for business payers.

Without in-field payment capabilities, customers must traditionally call or log in to various portals to arrange payments manually. That means not only is a payment held up for a seller, but those goods or services are delayed for the buyer, creating bigger bottlenecks along the entire supply chain.

“There’s definitely facilitating factors for both parties,” Horling said, “and I think it’s going to become more of the norm for companies to look to this kind of solution.”

That’s particularly true as technology continues to step in to address the growing complexities of mobile and in-field B2B business models. As digitization continues, these companies will have access to larger volumes of valuable data. While that can be a positive development, Horling noted that many businesses can struggle to make use of that data to its full potential, with data integration capabilities across various digital platforms to be a critical part of modernization in this industry, for payments and beyond.

“The evolution of technology is really changing the way business-to-business is done,” he said.

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The pressure on banks to modernize their payments capabilities to support initiatives such as ISO 20022 and instant/real time payments has been exacerbated by the emergence of COVID-19 and the compelling need to quickly scale operations due to the rapid growth of contactless payments, and subsequent increase in digitization. Given this new normal, the need for agility and optimization across the payments processing value chain is imperative.

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