Legacy Systems vs Digital Demands: The B2B Payments Dilemma

There’s a paper jam happening along the B2B innovation journey.

While automation has made significant inroads in certain aspects of business operations, the payments process remains largely fragmented, with paper invoices, checks and manual reconciliation continuing to be the norm rather than the exception.

This results in a piecemeal approach to back-office workflows and payments that can leave firms struggling to keep pace with automation and innovation reshaping B2B partnerships.

“Businesses often adopted payment automation in parts,” Holly Tennent, director, B2B payment solutions and card product management at Bank of America, told PYMNTS. “But today, they are shifting toward a more end-to-end accounts payable (AP) automation solution.”

As businesses come to view their AP function as a critical lever to unlock greater process efficiency, fraud mitigation and cost reduction, what was once a space dominated by fragmented processes is evolving into an ecosystem of virtual cards, embedded payment experiences and real-time data exchange.

Tennent drew a parallel between the rise of AP automation and consumer convenience trends, underscoring that the same instant and digital solutions that have revolutionized retail and grocery shopping are now becoming expected in business payments.

“Think about how curbside pickup didn’t exist not long ago,” she said. “That same concept applies to payment automation.”

“The technology is there,” Tennent added, “but the adoption process is still lagging.”

Overcoming Legacy Innovation and Integration Barriers

Despite progress, businesses in the U.S. continue to grapple with significant challenges in the payment space, particularly regarding paper-based transactions and system integration.

“We absolutely still have a paper problem,” Tennent said. “We also have integration challenges that have hindered growth in the B2B space. And that comes down to two main reasons: technology and resources.”

Legacy systems and outdated infrastructure create barriers to seamless integration. For businesses looking to modernize their payment processes, understanding what solutions are available and how to implement them properly is critical. Overcoming systemic inefficiencies can require a strategic focus on technological investment and process refinement. For example, while companies may have application programming interfaces (APIs) in place, the technical expertise required to leverage them effectively can often be lacking.

With so many payment innovations available, decision-makers may often feel overwhelmed and unsure of which path to take.

“Every client has a unique story,” Tennent said. “[We] like to simplify it through the lens of business challenges. What are the pain points keeping you up at night? What do you need in an AP automation solution to solve those challenges? And finally, what is your desired end state?”

One of the biggest fears businesses face in embracing new payment solutions is the potential burden on internal teams, but Tennent highlighted the importance of businesses assessing their current resources before rushing to adopt entirely new systems.

“It doesn’t always mean they need something shiny and new,” she told PYMNTS. “Often, businesses just need to reprioritize what they already have in place to focus on measurable impact.”

The Role of Banks in Driving Payment Innovation

As businesses navigate the complexities of payment transformation, banks and financial institutions play a critical role in guiding them through the process. Bank of America, for example, prioritizes education and tailored solutions to help businesses achieve their automation goals. Bank of America tailors solutions for each client, including process automation, virtual cards, electronic payments and enhanced remittance information alternatives.

“We recognize that based on client size and complexity, needs will vary,” Tennent said. “It’s important to ensure that we’re capturing the different priorities of AP, IT, treasury and procurement stakeholders.”

She emphasized that the key themes driving business payment strategies today are process efficiency, fraud mitigation and cost reduction. However, different stakeholders within an organization may have distinct expectations for how these objectives should be achieved.

For businesses looking to maintain a competitive edge, staying ahead of industry trends is crucial.

While many predict that checks will eventually become obsolete, Tennent remains pragmatic about the pace of change.

“Checks may not completely go away,” she noted. “But automation is going to further widen the gap between check and electronic payments.”

The commercial payments space is evolving rapidly, and businesses that fail to modernize could risk falling behind. However, with the right strategy and the support of trusted financial partners, organizations can overcome legacy barriers, streamline their AP processes and drive measurable efficiencies.

At the same time, Tennent predicted that the next generation of AP leaders will break legacy barriers as they bring a digital-first mindset to the space.

“These next generations grew up on technology. They don’t know anything different. It’s table stakes for them,” she said. “The demand for seamless integration is only going to grow, and businesses must be prepared to fund new technologies, create process improvements and enhance efficiencies.”