AI, Virtual Cards, Embedded Lending Define This Week in B2B

B2B payments used to be defined by paper and processes.

However, as the digitization of commercial payments continues, B2B payments are being defined by their workflows and data – both of which are increasingly the target of disruptive innovations capable of automating away rote work and unlocking better insights and efficiencies.

As commerce nears the second quarter of the 21st century, the B2B market is comparatively underserved in its payments needs by legacy solutions.

The top themes shaping the B2B landscape that PYMNTS tracked this week were around the growing impact of artificial intelligence on B2B workflows, embracing alternative solutions for lending and payments, and capturing new efficiencies through digital business intelligence platforms.

Using AI Helps Unlock New Opportunities Across the B2B Landscape

The PYMNTS Intelligence report “SMBs Race to Critical Mass on AI Usage” found that 61% of small- to medium-sized businesses (SMBs) are using AI to automate daily tasks, and the marketplace is responding to this demand.

AccountsIQ announced Thursday (June 13) that it secured about $65 million in a Series C investment to support continued product development and to embed AI throughout its cloud-based accounting platform designed for medium-sized companies and nonprofits.

Epicor acquired Kyklo Wednesday (June 12) to further its aim of providing businesses with “easy-to-use, practical, outcome-focused and responsible AI.”

Also Wednesday, Light emerged from stealth and announced a $13 million financing round to scale its AI-powered general ledger for multinational companies, reimagining the enterprise resource planning (ERP) concept “from the ground up.”

Underscoring the impact of AI, PYMNTS unpacked how AI innovations are transforming compliance management from a reactive to a proactive discipline, particularly within cross-border B2B payments.

At the same time, PYMNTS also dug into the transforming role of partnerships in B2B in light of OpenAI and Apple’s new deal for AI solutions.

Education Crucial for Growing Embedded Lending Solutions

Karen Webster spoke with Pipe CEO Luke Voiles and Victory Park Capital partner Thomas Welch in an interview posted Tuesday (June 11) about the benefits of embedded lending, which has been transforming the working capital solutions available to businesses.

“This brings the banking system into the software where the businesses are spending their time,” Voiles said.

“It’s a powerful thing to give someone that has never had access to capital but has an amazing small business,” he added. “… It can be a huge multiplier.”

Eighty-five percent of small businesses use external capital to invest in and grow.

The PYMNTS Intelligence report “Embedded Lending: From the Lender’s Perspective” found that lenders’ lukewarm interest in offering embedded lending options is out of step with SMBs’ interest in switching to providers that offer them.

“There’s a huge appetite [for embedded lending products] on the SMB side,” Arvind Ronta, global head of BNPL and embedded finance at Visa, told PYMNTS in an interview posted Tuesday. “We’ve seen that 56% of businesses that have stable cash flows leverage credit tools to expand, and 43% invest these new credit lines into R&D.”

Embracing Alternative Digital Payments

Alternative solutions are also transforming and digitizing B2B payments.

Paul Christensen, CEO of B2B payments accelerator Previse, highlighted to PYMNTS Tuesday the mismatch between buyer and supplier acceptance of virtual cards for B2B payments, noting that while 80% of buyers favor virtual cards, their use accounts for just 2% of their accounts payable (AP) transactions.

The reason for the supplier reluctance, Christensen said, boils down to the fact that issuers, acquirers and networks don’t yet have the tools to improve the value proposition of virtual cards for suppliers, nor to explain that value proposition well enough or to sell and implement the product.

Addressing this need, Forwardly added a “pay by credit card” option to its B2B payments platform Tuesday. With this feature, SMBs can accept card payments for outstanding invoices from their clients and make card payments to pay business bills to vendors and contractors.

Meanwhile, Dash Solutions is now using Visa’s digital payment network, Visa Direct, to allow Dash corporate customers to send real-time payments.

B2B-Centric Digital Platforms Help Unlock Operational Leverage

Airbase added spend analytics and vendor management capabilities to its spend orchestration software for mid-market and larger organizations Tuesday.

On Wednesday, Weave added a partner marketplace to its platform for small- to medium-sized healthcare businesses, while Regions Bank launched a new digital payments solution designed to streamline payment and billing processes for its commercial clients.

Supply chain automation firm CargoSense raised $8 million in new funding, the business announced Wednesday.

And PYMNTS explored Monday (June 10) why all the digital innovation reshaping B2B payments will ultimately rest on the interoperability and extensibility of payment systems.

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