When it comes to business-to-business (B2B) payments, a payment is never just a payment.
That’s because commercial payments are two-party systems, at a minimum, where the actual payment is bookended and influenced by a variety of factors, workflows and features ranging from speed to security and convenience and beyond.
These factors and features — particularly the tooling around them — take on a different hue when viewed through the lens of either the buyer or the supplier.
In B2B transactions, the focus on user experience (UX) has often taken a back seat to functionality and efficiency. However, as businesses continue to recognize the importance of seamless interactions and intuitive interfaces, the impact of UX within B2B payments is growing.
After all, the entrenched reliance on manual data entry and reconciliation processes within the commercial sphere has historically hindered the ability of firms to make informed, data-driven decisions promptly, while also leaving many businesses to grapple with a lack of real-time insights into their financial transactions and cash flow realities.
And even for those organizations having digitized their B2B workflows and accounts payable (AP) and accounts receivable (AR) programs, frequently the payments experience devolves into a kind of “portal war” where the buyer tries to force the supplier into their preferred modality, or vice-versa, with little interoperability in play.
That’s why, for the PYMNTS Series “Buy Side, Supply Side,” we are unpacking the crucial opportunities that modernizing B2B payments UX can give firms.
Read more: Will 2024 Be the Year of Win-Win Buyer-Supplier Dynamics?
From the buyer’s perspective, streamlined UX in B2B payments allows them to navigate through the payment process swiftly. Intuitive interfaces, clear payment instructions, and simplified workflows reduce the time required to complete transactions. This efficiency is particularly crucial for buyers managing multiple transactions simultaneously.
From the supplier’s standpoint, a positive UX in B2B payments means receiving payments promptly and predictably. An intuitive payment platform enables buyers to adhere to agreed-upon payment terms, reducing the risk of delays and ensuring a steady cash flow for suppliers.
“There is value in convenience; it makes customers more sticky,” Eric Foust, vice president of banking partnerships in North America at Trustly, told PYMNTS in November.
A well-designed B2B payment system also provides buyers with real-time visibility into their financial transactions. This transparency empowers them with better control over their cash flow, enabling financial planning and minimizing the risk of errors or oversights.
Suppliers appreciate a B2B payment system that automates invoicing and reconciliation processes. An efficient UX allows for the automatic matching of payments to invoices, minimizing discrepancies and potential disputes. This automation saves time for both parties and fosters stronger buyer-supplier relationships.
“The typical in-house AR program runs the same way it has for the last 20 or 30 years, same tools, same processes, sometimes even the same people,” Ben Lamm, chief operating officer at Capital One’s Trade Credit Business, told PYMNTS. “It’s an outdated legacy program. It’s manual and clunky, not just for the merchant, but also for their customers … [businesses] are hungry for efficiency, lower costs, cash flow management, risk protection, and providing a really positive customer experience to win and retain customers.”
“If you’ve equipped [an organization] with the tools to make customized purchasing offers in real time and reduced the friction for the buyer by giving them self-service capabilities backed by great customer service … all of a sudden, that little old AR program that was running in the background that hadn’t changed in years just became a really powerful growth lever,” Lamm added.
Get the report: Businesses Fast-Track B2B Payments Digitization to Boost Growth
Buyers often operate within complex systems involving various tools and platforms. An optimal B2B payment UX integrates with existing financial systems, enterprise resource planning and other business tools. This integration ensures a cohesive and connected experience, eliminating the need for manual data entry and reducing the likelihood of errors.
Still, if payments technology just makes it easier for one side of the transaction and not the other, then it is not the right solution — a universal adage that holds true within B2B.
“There has been so much innovation … we’ve seen a proliferation of so many different payment options around things like speed, terms and visibility,” Flock Freight Chief Financial Officer Pat Dillon told PYMNTS in November, adding that, “[B2B innovation] requires integration, and none of it is as quite as easy as you would hope it to be — but it is definitely an area where there is a consensus that moving the ball forward is a win-win for everyone.”
User-friendly B2B payment systems should also facilitate clear communication between buyers and suppliers. Notifications, alerts, and messaging features enhance collaboration, enabling quick resolution of any issues or discrepancies. This fosters a more transparent and cooperative business relationship.
As Kat Battle, product manager for Complete AP at Bank of America, told PYMNTS, “More and more organizations are recognizing the need to update and modernize what has historically been a manual, paper-based process — but one that’s also very mission critical to the business function.”
PYMNTS Intelligence in “Digital Payments Technology: Investing in Payments Systems for the Digital Economy” revealed that the 250 CFOs surveyed were prioritizing their system investments. In a perfect world, they will be prioritizing the UX of those systems as well.
We’re always on the lookout for opportunities to partner with innovators and disruptors.
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