The digital transformation sweeping consumer finance is now reshaping the landscape of B2B payments, urging financial institutions and corporate clients alike to abandon antiquated methods for modern, efficient solutions.
A recent PYMNTS Intelligence tracker, “Virtual Mobility: How Mobile Virtual Cards Elevate B2B Payments,” done in collaboration with WEX, underscores the pressing need for businesses to move away from legacy payment systems, such as paper checks, which were cited as significant drains on time and financial resources. These outdated methods frequently lead to delays and errors that disrupt everyday operations and compromise cash flow, posing critical challenges, particularly in an uncertain economic climate.
The report highlighted that these inefficiencies necessitate excessive staffing and contribute to transaction errors, underscoring a pervasive issue across the corporate landscape. To counteract these obstacles, the analysis positioned virtual cards and mobile wallets as solutions, offering enhanced security, streamlined automation, improved cash flow visibility and valuable financial incentives for firms seeking to achieve new business efficiencies.
The report further elaborated that virtual cards can deliver security, efficiency and return on investment (ROI) to B2B payments, enabling companies to streamline accounts payable (AP) processes, bolster fraud protection and unlock lucrative supplier rebates that drive business growth and improve cash flow.
Similarly, mobile wallets, drawing inspiration from consumer payment trends, introduce unprecedented flexibility and significant efficiency improvements by minimizing the administrative workload associated with traditional manual payment methods.
When integrated, virtual cards and mobile wallets can revolutionize B2B payments by enhancing security through unique transaction tokens, automating reconciliation and safeguarding financial data, while also offering precise control over expenditures through features like spending limits and merchant-specific restrictions.
Key findings from the report highlight the current state and future trajectory of B2B payment modernization:
- A recent survey found that nearly 73% of businesses have yet to automate supplier payments, significantly limiting their ability to gain a comprehensive view of money movement. This contributes to substantial challenges, with 51% of firms reporting excessive manual data entry, 47% experiencing data errors and process delays and 23% noting a lack of visibility in their AP processes.
- Fourteen percent of mid-market firms — those with annual revenues between $50 million and $1 billion — plan to adopt virtual cards within the next year. This represents a remarkable 322% increase compared to current adoption levels, with particular interest in the media and technology (28%) and fleet and mobility (26%) sectors.
- Eighty-two percent of merchants plan to expand their adoption of digital wallets, reflecting increasing consumer demand for convenience and security. This trend is influencing B2B payments, driving a pursuit of speed and convenience in corporate transactions.
Beyond the foundational advantages, the report also detailed specific operational challenges, such as the persistent problem of late payments for small businesses, which experienced an average delay of 9.1 days in Q3 2024, resulting in a total payment wait time of 28.7 days. It underscored how the adoption of advanced payment methods can significantly enhance the financial stability of smaller firms.
