Payments Innovation Drives Improved Operational Outcomes for Corporates

How businesses get paid has a sizable downstream impact on the way they operate.

And as businesses prioritize operational efficiency and working capital preservation, the B2B payments landscape is expected to see its own transformations in the coming years.

“B2B payments is the one payment area that lags everything else,” Tom Randklev, global head of product at CellPoint Digital, told PYMNTS for the “B2B Payments: Outlook 2024” series.

That’s because legacy systems in B2B transactions have been, and continue to be, heavily reliant on manual processes, personal relationships and traditional billing methods like paper checks and invoices.

But change is on the horizon. Legacy systems are giving way to modern, cloud-native platforms that facilitate seamless, real-time transactions. The elimination of paper-based methods and the adoption of digital processes bring unprecedented efficiencies, reducing operational costs and enhancing overall transaction speed.

“Innovation in B2B payments is heating up,” Randklev said. “And it’s centered around the ongoing digitization of the space, which brings a lot of optimization around operational efficiencies, cost efficiencies and just a better way of moving money.”

He said the most promising B2B innovations will align with the advancements already being seen in B2C payments, emphasizing connectivity, collaboration and a commitment to simplifying complex financial processes.

A profound B2B transformation is underway. “It’s a lot more digitization, but it is also a lot more consolidation and simplification,” Randklev said.

That’s because the once-staid realm of business transactions is experiencing a seismic shift, driven by digitization, modularization and the integration of cutting-edge technologies like generative artificial intelligence (AI).

But transformation goes beyond payments to impact the entire financial supply chain.

The focus here is not just on payment processing but on a holistic approach to financial operations, Randklev said, highlighting the importance of prioritizing payment efficiencies and preserving working capital for CFOs.

“It’s one thing for us to orchestrate payment processing or value-added services, but the next big step of that, and probably more of the umbrella piece to it, is the bigger picture where it’s the entire financial supply chain,” he said.

The goal is to find “that magical end-to-end single-platform solution,” he added.

Randklev also mentioned the influence of generative artificial intelligence (AI), which plays a role in automating legacy processes from procurement to invoicing.

“You create efficiencies just by automating a way of the legacy workflows,” he said.

Generative AI learns from data patterns, making it adept at predicting and optimizing various financial operations. The integration of AI-driven tools in B2B payments brings efficiency, accuracy and speed. Businesses can automate routine tasks, reduce errors and allocate resources more strategically, ultimately enhancing the overall payment experience, Randklev said.

“There’s a lot of opportunity in this generative AI space to find those automation points,” he said.

Simplifying B2B Payments’ Complexity

In response to changing interest rates and macroeconomic environments, businesses are adopting modularized approaches to their B2B programs.

The adoption of modularized systems allows for flexibility, avoiding vendor lock-in and enabling businesses to choose the best elements for their needs, Randklev said.

This approach involves breaking down complex systems into modular components, allowing companies to choose and integrate only the elements that suit their specific needs. The shift toward modularization not only reduces dependence on rigid legacy systems but also empowers businesses to create bespoke solutions tailored to their unique requirements.

The convergence of digitization, modularization and generative AI forms a powerful synergy, offering businesses a holistic approach to B2B payments, Randklev said. The digitization of processes sets the foundation, while modularization ensures flexibility and adaptability. Generative AI acts as a catalyst, automating tasks and optimizing operations for efficiency.

This integrated approach not only enhances transactional speed but also reduces costs, minimizes errors and positions businesses at the forefront of technological advancement.

Looking ahead, even beyond 2024, Randklev said there is potential in bundled services, especially in the airline and online travel association sectors — and that simplifying complex processes, such as collecting payments and authorizing transactions for vacation packages, represents a promising direction for the industry.

“Creating a single pane of glass to manage the view [of B2B payments] is directionally exciting for us, and for the entire sector,” he said.