3 Ways 5G Is Set to Revolutionize Real-Time B2B Payments

As global tech architecture advances, the time is ripe for the consumerization of B2B payments.

This means increased personalization and real-time responsiveness, transactional transparency, and an overall B2B money movement experience that is much more streamlined and friction-free.

The good news is this rosy future doesn’t appear to be that far away, as a sweeping digital transformation is currently modernizing the world’s economies and rapidly evolving the way organizations of all shapes and sizes transact and do business with each other.

One of the key technical pillars of tomorrow’s economic landscape helping drive this B2B reset will be the integration of 5G broadband networks, which many observers have heralded as the first generation of mobile technology to have a bigger impact on businesses than on consumers.

Firms both want and expect 5G to positively impact their business outcomes by enabling better insights, improved productivity levels, accelerated use of automation, better application performance, and the ability for hyper-rapid transaction settlements and other digital payment advances that can remove historical frictions while supporting growth.

That’s because 5G offers an exponential improvement in functionality over the current 4G connectivity standard it is set to succeed, providing broadband speeds up to 100 times faster as well as offering 1,000 times more capacity.

It is predicted to support next-generation mobile networks that offer far higher capacity and reliability, much lower latency, reduced energy use, and massively enhanced connectivity.

An explosion of connected services will be built off these foundational capabilities, replacing pre-existing and siloed legacy alternatives and driving a transformation of industries.

Future of the Economy Hinges on Money and Payments

Nine in ten small- to medium-sized business (SMB) owners told PYMNTS that all-in-one payment platforms for B2B transactions save time and are more convenient, and additional PYMNTS research has found that B2B payments as a whole are growing increasingly digital.

Capitalizing on 5G’s next-generation speeds, ultra-low latency, and high reliability will let organizations build on this trend and enable consistent responses in real or near real time between B2B actors, helping build sustainably collaborative relationships.

The technology’s real-time connectivity solutions will also help offer relief for accounting teams burdened with the manual processes of invoice creation, check writing and mailing invoices and payments by providing key modernizations to B2B processes.

As detailed in the PYMNTS report “Tapping the Payments Opportunity in SMB Retail,” 65% of medium-sized businesses are spending 14 hours per week on administrative tasks for payment collection.

5G also holds great promise for revolutionizing international transactions as well as domestic engagements by enabling a new wave of solutions that meet the needs of businesses that want less complex and easier-to-manage cross-border B2B payments, cash management and invoice reconciliations.

In an early January interview with PYMNTS, Anand Bindumadhavan, vice president of global banking at Payoneer, said that making cross-border payments should be as simple as sending an email.

While fast, efficient payments inherently help drive growth, cross-border B2B payments management today often sees businesses deploying solutions that are resource intensive and frequently erratic or inconsistent.

PYMNTS’ research in “The Innovation Gap: Meeting the Challenge of Corporate Payments Modernization” revealed that more than one in three executives at financial institutions (37%) said their digital payment solutions on offer today are only slightly or not at all as effective as they should be in addressing the many B2B frictions faced by SMBs.

Read more: India Outkicking Its 5G Coverage, Says Ericsson Exec at Davos

5G will bring a lightning-fast experience to banking and payment transactions that may make it the so-called holy grail for cross-border B2B payments, serving as a digital foundation for the next generation of businesses that will be built on real-time payment hubs and instantaneous data-transfer capabilities.

As PYMNTS wrote last month, 5G networks may even offer those slow-to-adapt organizations currently hamstrung by critical technical and infrastructure debts an attractive chance to leapfrog the prospect of playing catch-up with incremental investments by allowing them to capture next-generation broadband speeds that can properly support cutting-edge technology and drive beneficial experiences.

5G technology’s capacity for anywhere, anytime streamlined payments can help serve as a catalyst for innovative business models, and even more innovative B2B relationships.

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