Transcard President Chris Fuller discusses why a new approach to payments innovation is key to helping businesses digitally connect for less friction and more efficiency. “Digitally connecting buyers and sellers through their banks and ERPs means B2B payments and related data flows can be fast, transparent and more secure,” he explains in “A Look Forward: What Executives Wish for America and the World in 2021.”
As we raise our socially-distanced glasses to toast the start of the new year, “unity” will likely be on the minds of many. But that sentiment will take on a different meaning for payments professionals who are weary from years of grappling with the costs, complexities and risks caused by the gulf that exists between buyers and sellers. Payments professionals are more determined to bring buyers and sellers closer together to effortlessly exchange payments and related remittance data, without the need for keying, paper shuffling or time wasted chasing down information. Until recently, resolutions to unite buyers and sellers rang as hollow as promises to eat better, spend less and work out more.
But a new approach to payments automation makes me optimistic that 2021 will be the year that businesses digitally connect to one another to eliminate friction in the way they pay and get paid. B2B commerce has long been plagued by high administrative costs, process inefficiencies, long cycle times, data siloes and risk. The operational disruption and economic pressures caused by the pandemic exposed and exacerbated the shortcomings of B2B payments. The late payments caused by B2B payment issues went from being a nuisance to a grave concern.
It’s not that buyers and sellers don’t want to come together to achieve frictionless commerce — it’s that the systems, processes and standards that businesses use for handling B2B payments have stood in the way. The unique logins and passwords, account requirements, file formats and proprietary integrations for various fragmented competing systems limit opportunities for automation, increase fees and result in inefficiencies across the B2B payments lifecycle. Making matters worse, many businesses use spreadsheets to manage payment terms and to reconcile payments and invoices. Reducing this friction requires new thinking about how B2B commerce gets done.
Why Businesses Will Rethink Payments in 2021
Account-to-account (A2A) automation will make this a reality for more buyers and sellers in 2021. A2A solutions combine request for payment (RFP) functionality, accounts payable and accounts receivable invoicing, ERP integration and payment services onto a single solution. The RTP network facilitates the immediate transmission and settlement of payments and the exchange of standardized and enhanced remittance data. Invoicing capabilities enable suppliers to instantly present invoices via an e-invoice 24/7/365 for initial or recurring bills in their customers’ preferred online or mobile banking channel. ERP integration connects buyers and sellers and facilitates the exchange of data without the burden of a costly, resource-intensive project. And payment services manage a directory of trading partners, payment terms and preferences, standard reconciliation data and banking accounts details (i.e., the bank routing number and account number).
Digitally connecting buyers and sellers through their banks and ERPs means B2B payments and related data flows can be fast, transparent and more secure. With an A2A solution, this is more than wishful thinking — it’s a priority in positioning buyers and sellers for the economic recovery.
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