Tech Collaboration Gives Corporates Boost In B2B Payments Digitization Drive

Embracing the opportunities of digital B2B payments can provide a major leg-up for organizations of all sizes and industries, from enhanced transaction security to centralized access to payment data creating valuable propositions to make the shift away from paper.

Yet for the largest of enterprises, that migration away from the paper check doesn’t happen at the flip of a switch. For firms operating across multiple jurisdictions and business units, with complex back offices and supply chains, changing B2B payment practices means altering a variety of workflows.

For accounts receivable (AR) departments, the shift requires a significant investment in infrastructure and expertise to implement the correct payment processing tools and support their ability to function in harmony with other back-office platforms, especially the enterprise resource planning (ERP) system.

According to EVO Payments General Manager and Senior Vice President Greg Castro, that pain point has led many firms operating with tools like SAP to avoid a payments strategy overhaul. It also led EVO to pursue an SAP certification for EVO’s PayFabric payment gateway solution to support the digital payments add-on solution. With EVO’s support of that add-on, businesses using SAP solutions can process electronic payments using EVO’s PayFabric payment gateway.

As Castro explained in a discussion with PYMNTS, such market collaborations will play a vital role in helping large firms take a more strategic, methodical approach to B2B payments digitization — one that prioritizes digital transformation without forced disruption.

Closing The Loop

EVO first announced its SAP integration in February, an initiative that Castro explained was part of EVO’s effort to address the complexities — or, at least, the perceived complexities — of payments transformation among large corporate users.

One of the more pressing challenges of B2B payments digitization under the SAP umbrella has been the growing number of modules, meaning any payment technology adopted by an organization had to be carefully configured and integrated into each of those functions.

“Over the years, people have added on different modules, different users, added on countries, different currencies, and all of that SAP manages very well,” he said. “The introduction of digital payments has sort of convoluted that, in some cases, and made it very hard for businesses in multiple countries, with multiple divisions, to simplify that.”

EVO’s integration significantly cuts down that barrier, Castro noted, adding that these businesses now can at least explore the option of credit card processing.

In today’s business environment, Castro said the integration can be particularly valuable for enterprises offering web services and needing back-office infrastructure to support online payments. Breaking down the silos between services provided on the web and support for electronic payment acceptance means more efficient workflows, like understanding which jurisdiction or business unit is tied to a transaction.

“Authorization is captured within the system,” he explained. “Those settlements go through, and then that’s balanced back, and it reconciles those customer invoices in real time. There is no more batching, or all of those other scenarios that took place in the past.”

Exploring Payment Options

While the pandemic has certainly moved the needle on corporates’ modernization efforts and, as a result, pushed to digitize B2B payments, manual workflows still remain. The past year has perhaps served as proof that corporations cannot entirely transform their processes overnight.

Firms instead need to take a calculated approach to this change. Cooperation between service providers in the payments and enterprise technology industry is one important strategy to supporting a less disruptive evolution in the back office. Castro noted that it is important for the SAP integration to allow professionals to retain their same workflows and back-office behaviors.

The integration can also unlock other opportunities for merchants, like access to Level II and Level III card processing to lower costs, which “a lot of businesses still don’t take advantage of,” Castro said

It’s a reflection of just how far the corporate community has to go in its B2B payments digitization journey. But organizations aren’t alone in the effort. Through the cooperation of their service and technology providers, the road to electronic payments can become a bit smoother.

“What was once a 30-, 60-, 90-day [purchase order (PO)] process with paper checks … that will slowly go away,” said Castro. “Businesses are going to see in real time their cash on hand. [Days sales outstanding (DSO)] will continue to come down, creating more cash flow and more opportunities for businesses to leverage in other ways.”