Why Innovating B2B Payments at Scale Means Targeting Workflow Frictions

A foundational truth about B2B payments is that they aren’t really about payments.

Rather, commercial transactions are built on the back of workflows and data.

“It’s workflows and data first, and payments second,” Ben Weiner, senior vice president and global head of B2B payments at Nuvei, told PYMNTS. “And that’s what drives a lot of the complexity in B2B payments.”

The B2B payments market, valued at around $125 trillion, is in the midst of a critical transition away from paper checks toward electronic forms of payment. Within this market, accounts receivable and accounts payable are the key areas of focus, offering opportunities for growth and innovation.

“AR in particular is where I see the single largest opportunity for growth and ongoing innovation,” said Weiner.

In the ever-evolving landscape of B2B payments, innovation plays a pivotal role in addressing challenges and driving efficiency.

The interactions between buyers and suppliers, including invoicing processes, payment methods and communication between finance departments all contribute to the existing complexity in the space, Weiner noted, while simultaneously offering attractive opportunity areas for disruption and improvement.

“Any B2B transaction is a two-party ecosystem, and the way you interface with your customer is critical,” he said.

Addressing the Top B2B Ecosystem Friction Points

Weiner emphasized that AR automation presents a substantial opportunity for growth, especially when collecting sales for customers. Solving workflow problems and automating processes such as reconciliation and risk assessment are vital for enhancing efficiency in B2B transactions.

The need for workflow optimizations across the B2B landscape is a part of why Nuvei launched an integration with Microsoft Dynamics 365 Business Central Jan. 30, enabling small- to medium-sized businesses (SMBs) to incorporate various payment methods into their existing enterprise resource planning modules.

The integration allows Dynamics 365 Business Central customers to elevate their accounting workflow and payments by using Nuvei’s B2B technology embedded directly into their ERP.

“We’re taking what we’ve done really well for the better part of a decade and applying it to the largest ERP ecosystem in the world,” Weiner said. “Shortly thereafter, we’ll be launching our full office of the CFO suite, which includes AP automation and embedded finance.”

Weiner acknowledged the challenges posed by legacy processes and institutional inertia within B2B payments. Lack of quality solutions, integration issues and the perception of risk are barriers hindering the transition to more efficient systems. However, he predicted the ongoing elimination of legacy processes such as paper checks, human interventions in payouts, and the three-way match through advancements in automation and machine learning.

“Certain sectors have adopted electronic payments, and everything associated with them much earlier, including businesses in retail and hospitality. That’s because these were sectors that were usually consumer-facing B2C models,” Weiner said, noting that traditional B2B businesses such as supply chain industries and construction, manufacturing, distribution and wholesale have lagged in modernization initiatives due to the inherent complexity of their business models and higher average ticket value per transaction.

Reframing B2B Payment Needs as Critical Opportunities for Growth

Still, despite institutional inertia and sector-agnostic hesitation around moving to digital B2B payments, external factors like the COVID-19 pandemic, high interest rates and advancements in digital technology more broadly have slowly but surely accelerated the adoption of electronic transactions.

Above all, interoperability of modern solutions is crucial.

“A tool could do exactly what it’s supposed to, but if it doesn’t play nice and work with the system of record, you haven’t really solved the problem,” Weiner said.

He said artificial intelligence is also helping thaw the iceberg of institutional inertia.

“This is a unique point in history where you can create a $10 million to $50 million business with the least amount of human capital ever [using AI],” he said. “And that really changes the composition of finance departments. It makes them focus on automation and efficiencies.”

Looking into the future, Weiner outlines three key areas of innovation in B2B payments: embedded finance, software vendor collaboration and straight-through processing. Embedded finance, using payment providers’ data for banking services, is poised for growth. Software vendors are expected to focus on solutions that effectively solve problems for their customers. Additionally, collaboration between issuers and acquirers will reduce the friction caused by competing portals, simplifying the payment process.

“There’s going to be a ton of innovation in the next three to five years, if not sooner,” he said. “B2B payments has true whitespace and a large [total addressable market], which is rare in payments.”

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