Innovation in B2B payments can have an outsized impact on the global economy.
The easier it is for B2B companies to get paid, the easier it is for them to grow.
“There are three themes [around B2B payment innovation] we’re seeing: payment velocity, tooling and the role of artificial intelligence (AI),” Nick Izquierdo, executive vice president of payments at Billtrust, told PYMNTS for the new series “B2B Payments: Outlook 2024.”
“There’s a lot of initiatives going on in the industry to move and settle funds faster,” Izquierdo explained, noting that this trend is being driven by the need for efficiency, reduced transaction times and improved cash flow visibility.
The faster movement of money is also seen as a crucial factor in navigating the economic landscape, especially in times of prolonged uncertainty where faster transactions are not merely a quest for speed but a strategic imperative aimed at enhancing liquidity and improving cash flow visibility.
The second theme, referred to as “tooling” by Izquierdo, focuses on the proliferation of platforms designed to assist buyers and suppliers in their payment interactions.
The role of AI, which is creating waves in nearly every industry, offers particularly sharpened opportunities in B2B payments.
“AI has the potential to really move the needle for so much of the industry in terms of their ability to better understand what’s going on within their payments environments and the ability to be more proactive with their buyers or suppliers,” he said. “And alongside that, the productivity AI brings is really driving more success satisfaction out of both sides of the equation.”
With economic uncertainties, there is an increased emphasis on visibility and certainty around cash flow, as well as the use of AI to provide deeper insights.
“It creates a macro argument for the adoption of better solutions to be able to manage the increase in velocity and to have the right tools to focus on driving smart financial results,” said Izquierdo.
The use of AI in surfacing meaningful insights is seen as a game changer, allowing businesses to make data-driven decisions and optimize their financial processes, and the technology is emerging as a pivotal factor in B2B payments innovation.
“AI can surface really meaningful insights that historically would have taken quite a bit of time and data analysis to arrive at,” he said. “And with AI, this information can be disseminated across the organization much more easily.”
“[AI] lets businesses manage payment exceptions much more easily,” he added. “They can manage the collection process more elegantly all with the objective of creating a better buyer interaction and having that supplier stay top of mind within the buyer’s option set. Ultimately what we think will happen is the advancement of these tools and the broader use of these tools will reduce the level of what I call more mundane task work.”
By enabling more intelligent conversations and strategic decision-making, AI becomes a valuable co-pilot in navigating the complexities of buyer-supplier dynamics.
While initiatives within the industry are actively working toward reducing the time it takes to move and settle funds, Izquierdo noted that real-time payments are not necessarily themselves a game changer for B2B transactions.
“My gut tells me that speed alone and speed alone within the payment flow only isn’t sufficient enough to really change the game,” Izquierdo said.
The complexity of real-time payments and the need for both buyers and suppliers to adapt to advanced payment modalities raise questions about its status as a total game changer. However, ongoing developments, particularly in real-time ACH, are being closely monitored for potential benefits, he added.
B2B payments innovation is “really about having a toolkit that helps businesses delight their customers, creates the right amount of engagement with those customers, and drives a consumer-like engagement that offers a lot of utility,” Izquierdo said.
Today’s modern and advanced B2B payment platforms are not one-size-fits-all solutions; instead, they provide a toolkit for businesses to customize their payment interactions.
“What we’re striving for is helping our suppliers take what was maybe historically a siloed function within the accounts receivable organization and giving those teams a powerful set of tools that benefits them,” Izquierdo explained. “We’re moving to more segmented payment policies that help businesses drive better decisions… We think B2B transactions will become more bespoke over time.”
Izquierdo also emphasized the compounding nature of value within an integrated solution. The longer businesses stay within a unified platform, the more they can optimize processes and drive better results, he explained.
As technology continues to advance, B2B payments are poised for further evolution, bringing new possibilities and opportunities for businesses to optimize their financial processes.
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