Worldpay: B2B Payments Will Digitally Transform to Look More Like B2C Commerce  

It is becoming clear that B2B’s digital makeover will take a cue from B2C, such as the Amazons of the world, as paper checks give way to payments made with the click of a mouse.  Buyers increasingly will find sellers not through paper catalogs, but through online platforms — and tech-savvy millennials will lead the way as B2B interactions modernize.  

Lu (Fausha) Chen, senior strategy manager at Worldpay from FIS, said that several trends are underway that will make B2B payments seem a lot more B2C in nature — marked by ease of use and transparency.

The influence of B2C commerce has been far-reaching and has been having ripple effects in buyer/supplier relationships, she noted. 

That isn’t to say the shift to digital payments will materialize in one fell swoop. B2B transactions are typically more complex than those made directly by consumers in a retail setting, and often involve large sums that cross borders, time zones and currencies. 

That being said, there is still a long way to go for these B2C eCommerce influences to gain wider traction in B2B payments.  Companies are still at different stages of embracing and implementing the latest technology. For example, larger players are still grappling with the challenges of maintaining and upgrading legacy systems. 

In the industry, Chen told PYMNTS, “we do see an improvement of cross-border payments – making them easier, cheaper and faster, even real-time.” 

She pointed to several approaches to making B2B payments faster and more efficient. Incumbent players like SWIFT have introduced Swift gpi, and the payment schemes have been rolling out solutions like Visa Connect and Mastercard Track, trying to facilitate B2B payments by connecting the buyers and suppliers across single platforms. At the same time, providers across the ecosystem are driving the adoption of straight-through processing (aka STP) alongside these models. 

The Way It’s Been Done

Within the B2B sphere — which has traditionally been dominated by offline channels of contact and communication between buyers and sellers, paper invoices and checks — expectations have been shifting. She notes that these trends toward digitization were present before COVID-19, but have been accelerated amid the pandemic.  

The urgency is there to shift operations online, said Chen. A majority of B2B buyers have stated that online channels are their most important conduits to placing orders. The digitization of commerce has also ushered into the mix a broad range of alternative payment methods, she noted. B2B payments are rapidly moving away from the paper check, as getting paid faster and in some cases even instantly, is becoming vital in the effort to maintain healthy and visible cash flow. Add the fact that 75% of the workforce will be millennials by 2025, and the stage is set for further adoption of virtual cards, mobile wallets and even buy now, pay later (BNPL) in B2B activity.

See also: A Good Payments Partnership Goes a Long Way in Easing the Adoption of New B2B Payments Tech

There’s also room for traditional eCommerce firms to facilitate B2B relationships. As Chen told PYMNTS, one Worldpay from FIS partner — who used to focus exclusively on B2C payment platforms – shared that 25% of their customers are now B2B firms. Against that backdrop, B2C juggernauts such as Amazon and Alibaba might attract even more firms to list with them. The lure of these platforms is twofold: They include financing options and built-in, proven scale. The latter can be a powerful draw to SMBs seeking to sell more to enterprise buyers via online channels. 

Chen believes the positive effects of digitization are significant, as buyers can place orders on websites where a continuum of services are available, such as intelligent pricing, logistics options and a broad range of payment options. Upgrading ERP systems via cloud solutions enables real-time analytics and reconciliation and clear insight supply chain health, she noted.

As B2B practices and payments shift inexorably away from decades-old traditions and toward B2C-like speed and convenience, successful pivots will require a mindset shift among enterprises’ senior leadership. “The most difficult part of adopting any new tech is persuading the C-suite,” Chen told PYMNTS.