Stripe Says B2B Digital Payments Transformation Is in ‘Early Innings’

We’re just at the beginning of the transformation of B2B payments. Beyond the drive to eliminate paper from various back-end processes, the connected economy will help (and, in the process, be transformed) as transactions between buyers and suppliers become seamless.

Tara Seshan, business lead at Stripe Treasury, told Karen Webster that at a high level, business payment flows can and should be as easy as consumer payments flows.

“We are very much still in the early innings of the internet – and we’re in the early innings of Stripe, too,” she noted, even with the massive digital shift wrought by the pandemic. The percentage of GDP that is “on” the internet still pales in comparison to what it will be in 10 or 15 years.

The conversation came as part of the month-long series titled “What If? Reimagining Business Payments for the Digital Economy.”

As Seshan said of B2B: “We need to make them inherently digital. We need to make them faster.” The answers have been there for a while, but have been stymied by a lack of infrastructure investment.

The high-tech, intuitive experiences in B2C payments, she said, are elevating the ambitions of B2B solution providers in a way that makes them “question their assumptions” and create better experiences across the board. “B2B payments need to become a revenue multiplier for internet businesses,” she told Webster.

Broadening the Platform

Stripe has been broadening its platform to enable businesses to manage their B2B interactions, while linking with companies like Citigroup (and Citi for Virtual Accounts) to make enterprise-level treasury services accessible to the companies that are powering, and are being shaped by, the digital/connected economy.

The frictions inherent within B2B payments can be illustrated by the fact that even the most digitally forward companies – the software or subscription digital goods firms – still encounter barriers as they go global. They may be able to distribute their offerings anywhere, said Seshan, but building (or cobbling together) systems for payments in different currencies, or invoices in different formats … well, that’s easier said than done.

There’s a global infrastructure problem that still must be solved in B2B, she said, even as firms have solved the issue of giving consumers what they want in terms of products and services.

Stripe, in developing Treasury and tax-related and invoicing products (among other enterprise offerings) has been able to help firms move beyond the paper check. That continuum of services can help client enterprises realize revenue streams that would otherwise be out of reach.

In the case of small businesses or sole proprietorships, said Seshan, enabling them to buy their inventory on a card, operate with a bank account and get the financing they need – in other words, be fully integrated with the same place where they earned revenue – can bring those companies fully into the digital, connected economy. That’s especially true with Stripe Capital, she noted, with micro-lending that gives merchants cash advances that can create beneficial relationships in an ecosystem that develops between Stripe, the financial institution and the enterprise.

Along with that connectivity, said Seshan, Stripe is working with (not competing with) FIs to deliver a “clean experience” via APIs to enterprise customers. “We want to harness [the FIs’] abilities, and then focus all of our time on the API, the product, the technology, our global payments and the treasury network that sits above that financial institution,” she explained. In that way, end users can instantly onboard onto Stripe’s treasury accounts rather than having to do the “usual rigamarole” of faxing papers to open a bank account.

Seshan related how connectivity can help a platform for farmers build money management accounts on top of Stripe Treasury – issuing cards with the aid of SPIs to enable farmers to receive embedded banking solutions (and, in the case of the pandemic, receive COVID relief funds).

Looking ahead, said Seshan of the digital transformation of B2B, “if we have this dream of ‘let’s make payments move the way emails move, and get them around the world fast’ – that’s the right north star for us to follow.”