This Week in Payments: Walmart Expands its Business Model, Businesses Still Use Checks, and BNPL Has Opportunities in B2B

Walmart, B2B payments and buy now, pay later (BNPL) were topics of conversation in the payments industry this week, with Walmart expanding its business model, B2B payments trying to go digital and BNPL finding a place in B2B world.

Chris Tsai, co-founder and CEO of Resolve, joined PYMNTS to discuss This Week in Payments.

Walmart Takes Impressive Ground

Topping the agenda were Walmart’s earnings and president and CEO Doug McMillon’s talk about the company’s changing business model, including its investment in marketplaces and advertising.

Read more: Walmart Says ‘Business Is Increasingly Digital,’ Pledges Further Investment in Tech

Tsai said that with Walmart stores acting as fulfillment centers, the company can win by offering speedy delivery.

“On the multi-front war of commerce that they’re waging to basically win consumer share of wallet, it does seem like they’re taking impressive ground,” Tsai said.

In addition to the supply chain game, there’s also the competition to stay top of mind among consumers. Here, Walmart’s grocery business helps as it competes with Amazon-Whole Foods.

Read also: AMZN vs WMT Weekly: Waiting on Earnings, Betting on Health

“Yes, Amazon started from maybe an online store perspective, but Walmart’s physical footprint is not something to be trifled with,” Tsai said.

Businesses Keep Using Paper Checks

Another topic of conversation within the payments industry over the last week was business-to-business (B2B) payments, and specifically the march to make business payments digital.

See: The New User Experience: Tracking The Consumerization Of B2B Payments

While paper checks are not necessarily fast or efficient, Tsai said they are secure and convenient — and businesses are used to paying each other with checks. He added that people who have been in business for many years may get some comfort from seeing a check with a familiar name on it.

“So, I wonder if the right way to think about it is, are we trying to replace or kill the check, or are we going to try to figure out ways to honor the reasons that checks kind of support the way we think about B2B transactions, and we should automate it around them,” Tsai said.

Learn more: How FIs Address B2B Pain Points

With digital lockboxes, he said, the friction of paper checks can be eliminated.

BNPL Adapts to Work in the B2B Space

ACI Worldwide launched a new product for merchants that enables them to offer customers payment options that include more than 70 buy now, pay later (BNPL) lenders.

Read more: ACI PayAfter Integrates 70% BNPL Lenders Merchants Can Offer Shoppers

There’s also an increasing amount of talk about BNPL in the B2B space.

See: BNPL’s Deferred Payments Could Be Better Fit For Businesses Than Corporate Cards

“There’s a lot of people trying to work on the simplicity and embedded points, but I don’t think there’s a lot of folks who understand that the very nature of B2B transactions is quite relational,” Tsai said.

By bringing BNPL principles into a B2B context creates an opportunity for BNPL to drive more business for B2B sellers, he added.

B2B Remains More Complex than the Consumer Space

Another aspect of B2B relationships is that a payables team at a large buyer may dictate the terms to a very small supplier.

“So, I think you have to respect the fact that certain net terms will have certain conditions applied to them,” Tsai said.

B2B also involves embedded payment operations, procurement processes, approvals, and checks and balances.

“Doing that in 2022 terms, as opposed to 1990 terms, actually goes a pretty far way in making the move toward the digitization and the kind of automation that we all want,” Tsai said.

At a time of supply-chain issues and everybody having cash-flow issues, anything that can reduce friction and support a healthy supply chain is welcome.

“The time is now for B2B buy now, pay later to really make the supply chain snarls go away,” Tsai said.