Data Integration Takes B2B Payments Modernization To The Next Level

Whether it’s the proliferation of B2B marketplaces finally embracing online payments, or the gradual migration away from paper checks as buyers and suppliers grow more comfortable with ACH, there are plenty of signs of B2B payments’ willingness to evolve.

In the U.S., with paper checks still so prevalent, the adoption of electronic payments technologies is undeniably a step in the right direction. For FinTechs and financial service providers, laying the groundwork to lower barriers to that adoption will be key.

But the B2B payments arena is also beginning to set its sights on loftier goals beyond mere digitization. EVO Payments President of the Americas Brendan Tansill recently spoke with Karen Webster about the opportunity for robust data integration strategies to elevate value for buyers and suppliers willing to embrace change. Plus, he explored what will – and what won’t – create immediate disruption within commercial payments and the technology providers that facilitate them.

Setting The Stage For Digitization

When it comes to payments digitization, there is more to the story for B2B companies than understanding the growing importance of modernization. Broader industry forces, including the rise of digital B2B marketplaces and the prioritization of the buyer-supplier relationship, are contributing to the growth of commercial card and ACH acceptance.

According to Tansill, making the change is a matter of dollars and cents, especially for suppliers that have historically resisted electronic payments acceptance.

“Unquestionably, a huge piece of it is cost,” he said, adding, “Moving online allows for faster collections. It allows for ways in which one could incentivize faster payments by facilitating discounts.”

Automation resulting from ePayments adoption means a lower cost of headcount in the accounts receivable department, for instance, while the growing ability for technology solutions to capture Level II and III interchange data is further reducing the financial burden of card acceptance.

Other efforts by FinTechs to incorporate multiple payment methods within a single solution have also provided a more consolidated and cost-efficient approach to ePayments support. Tansill pointed to EVO’s payment gateway PayFabric, for example, which recently integrated proprietary ACH capabilities to join its existing support for cards.

Elevating The B2B Payments Landscape

Electronic payments adoption is all well and good, but digital transactions alone aren’t enough to transform the way businesses transact with each other. What’s more, in an increasingly crowded service provider market, ePayments capabilities aren’t enough to create as much value as many firms now demand from their technology partners.

Data, and data integrations, are critical to driving further progress in B2B payments. Connecting embedded transaction data, or Level III interchange data, into the ERP allows suppliers to wield that information for more robust workflow automation in processes that surround the transaction itself.

Online B2B marketplaces adding value through embedded payment functionality are similarly facing pressure to integrate transaction data for suppliers’ back-end systems, while for FinTech providers and their business clients alike, this data integration can also unlock opportunities for new insights and revenue streams.

“The digital journey is not just around working capital cycles,” said Tansill. “It’s also around the availability of data.”

A Partner To All

As the number of FinTechs looking to help elevate the B2B payments experience grows, there are several directions these providers can take. Tansill noted that for EVO, there are a few dos and don’ts for its own roadmap.

An emphasis on ERP integrations is critical, particularly considering how saturated the ERP market is today. There is also a huge push for both automation and cloud adoption, which Tansill says makes those strategies a focus for EVO as well.

“Cloud for smaller businesses is incredibly attractive,” said Tansill, explaining that it saves them the hardware spend for on-premise equipment and the need for local data center expertise. In addition, cloud can also cure some of the headaches surrounding software updates and security requirements.

And in a climate of consolidation, there is also a growing interest among payment solution providers to acquire point-of-sale (POS) software – a logical move, said Tansill, but not one that’s right for EVO, which is positioning itself as “Switzerland” in the market. As the firm looks to ease points of friction for business customers, integrating its processing technology within as many third-party software firms as possible is key.

“I can’t be partner to all if I’m an owner to some,” Tansill said.

Uncertainty remains as to exactly how the B2B payments ecosystem will evolve moving forward now that more businesses are embracing electronic payments acceptance. However, by focusing on lower costs and data integrations that can optimize workflow, FinTechs can take several paths to capture their share of the market.

But whatever path they choose, Tansill said there is a bigger picture that must be kept in focus: B2B payments technology must strengthen the buyer-supplier relationship, and tools that can promote prompt payments will succeed in that initiative.

“Enjoying a good, healthy relationship with your vendors is of critical importance,” he said.