Finding The Payment Rail Mix To Tackle B2B Payments Friction

Innovation is all about thinking outside the box – sometimes.

In this week’s look at Payment Rail Innovation, PYMNTS finds a variety of ways industry participants are wielding and mixing various payment infrastructures to achieve desired results.

For some, that means thinking within the box — the lockbox, that is — to improve upon the legacy of the increasingly outdated paper check. Others, meanwhile, continue to adopt blockchain with a focus on cross-border B2B payments efficiency and transparency.

Mixing payment rails is a strategy that is growing in popularity thanks its opportunity to address friction on multiple fronts, from helping B2B buyers adopt commercial cards to combining the benefits of two rails for more seamless global transactions. PYMNTS breaks down the latest pilots, analysis and partnerships in payment rail innovation below.

Citizens Bank Improves The Check Experience

While many of today’s biggest advances in payment rail innovation are focused on migrating away from paper, Citizens Bank & Trust’s newest partnership aims to wield technology to improve upon the paper check. The bank announced its collaboration with CheckAlt, which will provide Citizens with lockbox and treasury management solutions, allowing Citizens business customers to digitize data from checks they receive and process.

IMF Weighs Digital Currency Pros And Cons

The International Monetary Fund is weighing the pros and cons of digital currencies as more central banks across the globe progress in the development of proprietary tokens. In a recent report, the IMF highlighted some potential benefits, as well as significant downsides, to the technology. Among the biggest concerns in its report include greater exposure to global market volatility, “bouts of confidence crisis” in global stable coins that could affect financial stability, and increased exposure to risks pertaining to illicit activity and regulatory shifts.

The IMF’s report comes as about 80 percent of central banks across 66 nations continue to explore the development and issuance of their own digital currencies. Forty percent currently have ongoing pilots.

Ripple Finds Another Partner For Blockchain

As the IMF considers the opportunities and risks in digital currencies, blockchain payments company Ripple has secured a new partner that showcases the B2B payments landscape’s ongoing interest in distributed ledger technology over legacy payment rails. Cambridge Global Payments is now collaborating with Ripple on a cross-border B2B payment solution that uses Ripple’s payment network RippleNet. Currently in the pilot phase, the initiative aims to greatly accelerate the movement of funds across borders while enhancing transparency and payment certainty.

BBVA Experiments Mixing SWIFT gpi, Faster Payments

Also focused on accelerating B2B payments across borders is the U.K.’s BBVA, which is currently in an experimental initiative that would integrate SWIFT gpi with the U.K.’s Faster Payments Scheme, its relatively new real-time payment rail. In a statement, BBVA head of Corporate Payment Strategy Raouf Soussi said that the integration will “further enhance customer experience, adding real-time processing of payments in British pounds to the benefits gpi already offers: tracking from start to finish and transparent costs.”

According to reports, the pilot has so far been successful and highlights the potential to overcome barriers to seamless global payments like time zone limitations.

Mastercard Mixes Rails For B2B Card Adoption

Mixing payment rails isn’t only useful for cross-border transactions. In the Asia Pacific region, Mastercard has enhanced its B2B payment offering via the Mastercard Track Card to Account Transfer service. In a recent announcement, Mastercard said the feature allows businesses to use commercial cards to pay their vendors, even when suppliers don’t accept cards, a technology that combines payment rails to ensure funds land in vendor accounts while B2B buyers can embrace digital payments.