Mapping the Money: Why Payments Innovation Starts With the Customer Journey

As companies mull updates to their payments processes, the changes required to automate and digitize those (sometimes) analog interactions can prove daunting — and costly.

The movement toward frictionless commerce is a big undertaking, just as it was before the pandemic forced us all to shift to digital channels.

But by focusing on outcomes rather than challenges and taking a modular approach with advanced technologies, such as artificial intelligence, change becomes manageable, paying dividends over the long term, Rhonda Green , head of Treasury and Payments Sales – Emerging Middle Market at J.P. Morgan , told Karen Webster.

Friction does not need to stop a transaction in its tracks, Green said. Friction can come in small doses — a stutter step in the login or a pause to pick up the phone and reach out to a customer service center. But the little moments add up. For the companies that don’t take a long look at their payments experiences, the impact can be decidedly negative.

“Whether it’s B2B or B2C, we all have choices,” which means it’s easier than ever to switch to a competitor, she said. “Thinking about your business — and whether you have customer retention and improved customer loyalty — leads to growth and scale. Those are the outcomes. A frictionless ecosystem allows you to do that.”

Revisiting the FIT Framework

The conversation with Webster came as the PYMNTS CEO has been developing her FIT framework over the past several years. That framework takes stock of (F)riction, (I)nertia and (T)ime that all must be in sync to drive growth. Finding the balance — especially for the middle-market growth corporates that are Green’s clients — is no easy task, as companies must make sure they are not the proverbial weakest link in a supply chain, as partners, vendors and end customers all form those respective ecosystems.

Despite the strategic, technological and financial investments that might need to be considered, other costs might be weightier, Green said.

“There are direct costs and measurable opportunity costs for businesses that choose not to embrace a frictionless ecosystem,” she said.

In time, those steppingstones toward a frictionless ecosystem move from competitive advantage to table stakes.

“Businesses just don’t have the opportunity of remaining in the status quo,” she said.

There’s at least some roadmap from the experiences that we all share as consumers — and consumer behavior ultimately shapes business processes. The seamless process of taking an Uber, for example, makes us familiar with what embedded payments are and how they work.

“That helps drive the trends that we’ll see as we move towards the more frictionless concepts,” said Green, adding: “We take those expectations into the business world.”

Mapping It All Out

To overcome inertia and the status quo, Green advocated mapping the customer journey in B2B and B2C settings. The procure-to-pay or consumer-facing journeys may not be as streamlined as some treasurers and chief financial officers might think, and there will be room for improvement and to remove some of the manual-based pain points.

“Anytime you speed up the transaction flows, it improves cash positions, cash flow management, and reduces errors, as well,” she said.

Change is becoming easier and faster (that’s the Time component of the FIT framework) with the proliferation of APIs and other advanced technologies that help reduce the “tech lift” required, she said.

Modular approaches and CRMs address payment flows and allow companies to harness customer data to find new payment solutions to meet demand, such as digital wallets and virtual cards, she said.

As for the seamlessness that can eventually be realized, Green said: “Imagine a world where, across all devices, whether mobile, desktop or laptop, you can look at invoices and make a payment decision, such as a real-time payment, and it automatically feeds into your ERP system.”

AI in the Mix

Although AI may be among the buzziest of buzzwords in payments (and, Webster observed, may be among the “words of the year” for the industry), Green said AI has proven — and will prove — useful in harnessing data to unlock what she called “data-driven insights” via predictive analytics that help forecast cash flows and improve inventory management.

AI will be at the forefront of creating what Green said is a “white-glove service,” allowing customers to manage information, access and perform transactions independently, on a self-service basis.

“This reduces friction while you’re empowering them,” Green said, adding that “businesses that choose to take advantage of a frictionless ecosystem will have a sustainable competitive advantage over businesses that don’t.”