B2B Payments Forging New Paths With B2C Tools

At earlier moments of B2B FinTech development, the industry seemed to be following in the footsteps of the business-to-consumer space. Payments innovations would soon gain traction with consumers before they slowly made their way into the world of corporate payments.

The trend seems to be reviving, though, according to Intuit Developer Group Vice President Vinay Pai, small businesses could be leading the charge this time.

Intuit has just announced a host of partnerships that integrates financial services from B2C payments giants into the QuickBooks small business accounting platform. Among them are PayPal and Apple Pay, both initially built for the consumer payments space but which have recently introduced their own B2B features.

Part of that evolution, Pai told PYMNTS, is that traditional trend of B2B payments following B2C’s path. But in many ways, small businesses are forging their own path with these payments technologies.

“These small businesses are consumer internet users,” he explained. “They’ve been using online banking; they’ve been paying bills online. They’re on Twitter and LinkedIn. They’re already putting lots of their personal information on the cloud.”

That trust in cloud technology means these small business owners are more willing to be similarly trusting with their business’ information in the cloud, too, Pai added.

“When they go to run their small business, they’re expecting that same kind of convenience,” he said. “They’re expecting things to be available on their phone, on their web browsers, when they’re out in a taxi. For them, all of these things are very natural.”

The VP cited research released earlier this year from Intuit, which found that small businesses are flocking to cloud apps to run their businesses. According to its 2016 Appification of Small Business Report, 68 percent of SMEs across the U.S., Canada, U.K. and Australia already use mobile- or web-based apps, which promotes automation and more efficient use of time, Intuit said.

Indeed, many of the apps used by small businesses are built for the SME market, like QuickBooks itself. But integrating traditionally B2C solutions into a B2B payments scenario is also a trend, Pai said.

“Small businesses are leading the way,” the executive declared. “They’re very comfortable with paying electronically and putting their information in the cloud.”

Apple Pay’s recent launch as a web solution made it even more accessible for use in B2B scenarios, Pai said. Supporting Apple Pay, PayPal, cards and ACH within QuickBooks is part of the company’s effort to promote both choice and speed in supplier payments.

“An invoice normally takes 30 days to get paid,” Pai said. “An electronically enabled invoice usually gets paid in less than 10 days, and half of those invoices are getting paid the same day, because it’s convenient.”

There are attractive traits of solutions like Apple Pay and PayPal that might encourage a small business owner to pay their bills with these tools. Users don’t have to send their credit card information to their supplier, for example, while data from the payment is automatically linked to existing accounting platforms.

But it’s not a guarantee that an electronic payment made via PayPal or Apple Pay will necessarily come any faster to a supplier. Pai explained that suppliers can set payment terms for their buyers, and even then, while a payment may take less time to land within a company’s bank account, some businesses may still choose to wait several weeks to settle their bills.

And Apple Pay has yet to prove itself as the new way to pay. Earlier this month, the solution celebrated its two-year birthday, and the technology is still received with mixed reactions. Apple hasn’t released specifics on transaction volume, but according to PYMNTS data, Apple Pay holds about 4.5 percent of the transactions pie in the U.S., down from Oct. 2015. The majority of consumers that have used Apple Pay told PYMNTS and InfoScout that it’s no easier or faster than using a card.

Apple Pay’s launch on the web, however, could help it gain traction. Further, while use of the tool among consumers has yet to really take off, its performance may see a different trajectory with the corporate user.

Pai told PYMNTS that Intuit’s decision to integrate the likes of PayPal, Apple Pay and American Express into its solution are about their abilities to deliver what small businesses demand: automated accounting and data entry, better cash flow management and data analytics capabilities.