B2B Payments

WEX’s Dearborn Says B2B Payments Has Reached Tipping Point

When it comes to the scope of changes that businesses have implemented in the past seven months of COVID-era adaptation, characterizing the digital shift as a mere “acceleration” would be an understatement.

“I think when the pandemic hit in early March, it really put a gun to the head of many companies by taking what have been Byzantine processes around accounts payable or accounts receivable and moving to much more digital means,” Jay Dearborn, president, corporate payments of WEX Inc., told PYMNTS.

The Portland, Maine-based FinTech leader said from his view, at least one corner of the payments industry has reached a tipping point and is never turning back.

“I really don’t think in today’s day and age that you can ignore the AP or the AR digitization question,” Dearborn said of the increasing merge of the corporate accounts payable and accounts receivable functions.

And apparently, he’s not alone. Dearborn points to a July study of FinTech decision-makers that WEX commissioned that showed 72 percent of respondents said their processes have become more digital throughout the pandemic. But what he found even more telling was that 86 percent felt that those companies leading with technology transformation in their payments department would be best poised for rebound heading into 2021 and 2022.

“We had more than 300 respondents, more than half of them were C-suite executives, and what we see across the board was a resounding run toward the digitization of payments,” Dearborn said.

Blessed To Have Tech Solutions

In some ways, the rapid response that this unanticipated calamity demanded underscored how lucky companies were to have access to technological solutions that made the seemingly impossible, possible.

“We’re all blessed in this industry that there are tools available to treasury banks and to FinTechs alike that allow those with legacy processes to modernize fairly quickly,” Dearborn said.

As he sees it, corporates that still haven’t gone through an AP automation transformation “need to call up your local treasury bank and determine if there’s a digital offering that they can help steer you toward.”

How Do We Get There?

While much work and improvement has been done in the past few months, Dearborn admits there’s still a lot more to do, especially when it comes to bridging “the AP-AR divide,” which he said has loomed over his career in payments for 20 years.

“We are marching in the [right] direction as an industry,” Dearborn said. “Our job, particularly on the AP side of the house and with payers, is trying to figure out and enable them how to digitize their payments and get the data richly packed against those payments so that we can bridge that divide.”

To that point, Dearborn said when WEX works with organizations to digitize their accounts payable, it tries to pull out costs from their AP department while also giving them access to new sources of revenue.

“When we talk about pulling out costs, it’s about how do you automate the accounts payable process. How do you make it less laborious? How do you ensure that you reconcile and match the payments going out the door and how do you gain access to float with your business,” he said.

While on the revenue side, he said, that typically means giving companies access to getting card rebates.

What Does Success Look Like? 

Dearborn understands that it isn’t easy to tie payments and data together, considering the trillions of dollars that flow through the American economy.  But he also said the benefits of automating these packets of payment information are undeniable as the long-term outcome.

“I think we collectively all know what the end of the movie looks like,” Dearborn said, before characterizing a bridge not so far in the future, “that crosses AP to AR with a payment, with terms, at the right price, with rich data.”

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NEW PYMNTS STUDY: ACCELERATING THE REAL-TIME PAYMENTS DEMAND CURVE – NOVEMBER 2020

About: Accelerating The Real-Time Payments Demand Curve:What Banks Need To Know About What Consumers Want And Need, PYMNTS  examines consumers’ understanding of real-time payments and the methods they use for different types of payments. The report explores consumers’ interest in real-time payments and their willingness to switch to financial institutions that offer such capabilities.

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