Buried B2B Payments Shortcuts Often Hiding in Plain Sight

Data can help B2B payments more fully enter the digital age.

Jennifer Petty, managing director, treasury product at Bank of America, told PYMNTS in an interview that coming out of the pandemic, getting rid of paper checks has become an increasingly important goal for commercial clients.

“They really want to understand how they can digitize their payments,” she said. In fact, about 8 in 10 professionals see digital transactions as critical to growing their firms’ top lines.

She added that the wealth of information that the financial institution has gleaned about enterprises could be helpful in three respects. It can help Bank of America pinpoint where, how and why clients are using checks and give them a helpful nudge toward digital channels. It can also move its client suppliers to digital payments in ways that save money in the process.

“If you are looking at a card opportunity,” said Petty, “there are many things that can help the bottom line.” That’s especially true as enterprises tackle financial forecasting and want to boost their working capital. Bank of America, she said, helps improve B2B and supply chain efficiencies by bringing buyers and suppliers together to accept digital transactions across online networks.

“Then there is a third component with this data — that when you pay these suppliers, what kind of data do they want so that they can reconcile payments quickly?” she said.

Increasingly, the bank’s customers have been putting data innovations to use in real-life interactions. Companies that tend to be short-staffed — particularly in accounts payable and procurement — benefit when a bank reaches out proactively to help them leverage existing rails for streamlining payments. That eliminates the technical heavy lifting of taking payments in-house, she said, and frees employees to devote time to more productive activities.

“This gives us the opportunity to share data about ‘here’s where you’re writing checks. Here are the suppliers that will accept digital. And if you do all of these things, you’re going to be able to save costs on generating those checks,’” she said. “Prior to our investments and process enhancements, the match rate was just 25%. Today, we can move paper to digital at least 50% of the time without any phone calls to those suppliers, just by matching the data.”

The positive ripple effects can expand throughout a supply chain, she said, as at least some digital payments can offer revenue share opportunities and reduced fraud.

Looking Ahead 

The urgency has been increasing to embrace digital commercial transactions, she said, as working from home becomes ever more firmly entrenched. Not being able to get into the office, after all, has been a tailwind toward moving beyond paper and considering digital payment options.

“We’ve seen a 50% increase in customers coming to us month over month to talk to us about digitization,” she said. And as those clients find themselves more comfortable with digital payments, Petty said, they modernize transactions to and from their end consumers.

“We’re in an economy where clients are very focused on expenses and focused on how they can improve their working capital,” she told PYMNTS, adding that “we are able to see the ins and outs of data through really trying to streamline payments. And there’s a lot of information that we can use to help those firms get from digital ‘Point A to Point B.’”