Digital B2B Payments Turn User Experience Into a Superpower

Not all B2B payments have a great user experience (UX). But all great B2B payments elevate the end-user experience.

The problem with building convenience into business payments is that, while in theory it sounds relatively simple, in practice it ends up being incredibly difficult.

B2B payments exist primarily below the waterline — being made up of workflows and data as much as, if not more than, they are the actual transfer of funds. And below that same waterline lurks four key buckets of complexity around risk, regulation, infrastructure and cost basis.

Historically, B2B payment processes have been plagued by inefficiencies, such as manual invoicing, slow payment cycles, and complex reconciliation procedures. These inefficiencies not only strain cash flow but also consume time and resources that could be better spent on core business activities.

Digital mechanisms are slowly chipping away at the long-standing dominance of paper checks. But to fully turn the tide, a great B2B payments UX needs to solve for thousands, if not tens of thousands, of small issues and fragmentations across payments infrastructure, process, and compliance.

This can be a daunting proposition, but companies are recognizing that improving the UX for B2B payments can drive efficiency, security and business agility — as well as keep their commercial customers and suppliers happy.

Read more: Building Better B2B Relationships Through Payments Innovation

Elevating User Experience

Efficiency is at the heart of any successful business operation, and B2B payments are no exception.

But optimizing B2B payments tends to run through, and into, the following bottlenecks: building a frictionless experience runs into know your business (KYB) requirements; removing friction can result in an increase in fraud — and card networks will ban providers who fail to get their fraud rates down. Banks will also de-platform providers without effective anti-money laundering (AML) processes. B2B payments can also simply just not work due to formatting errors and other manually driven disconnects.

“There’s a lot of messiness around payments, particularly very large B2B payments that might house hundreds or thousands of invoices with hundreds of associated line-item details,” Boost Payment Solutions Founder and CEO Dean M. Leavitt told PYMNTS last month. “Large enterprises on both the AP [accounts payable] and AR [accounts receivable] side are looking for ways to automate those processes, digitize them and reduce their cost as well.”

Against this backdrop, PYMNTS Intelligence finds that automation, virtual cards and digital payments are becoming the new cornerstones of B2B payments, with businesses recognizing their role in strengthening buyer-supplier relationships. According to the report, a “consumerization” of the B2B payments experience is inevitable as businesses recognize the need to build loyalty with their “other” customers: B2B partners.

“There is value in convenience; it makes customers more sticky,” Eric Foust, vice president of banking partnerships in North America at Trustly, told PYMNTS in November.

Read more: Will 2024 Be the Year of Win-Win Buyer-Supplier Dynamics?

Agility and Certainty

Certainty is another critical factor in B2B payments, particularly when dealing with large sums of money and complex financial arrangements. Uncertainty in payment processing can lead to cash flow issues, strained relationships with suppliers, and even legal disputes. By elevating the user experience, businesses can achieve greater certainty in their payment processes, reducing the risk of errors, delays and disputes.

“B2B transactions have traditionally had a slower approval process, and B2B players have been slower to adopt new technology. But what we’re seeing with a shift to digital is that there is now more data, more controls, stronger authentication coming into that B2B space, all the while bringing down the cost and improving the risk models,” Jennifer Marriner, EVP, Global Acceptance Solutions at Mastercard, told PYMNTS. “We’re definitely seeing on the B2B side a realization that there’s a way they can streamline their business.”

Improving the UX in B2B payments via automation and virtual cards can play a crucial role in enhancing security. A well-designed payment platform can incorporate advanced security features, such as multifactor authentication (MFA), encryption, and real-time fraud detection, without compromising on usability. By making these security measures intuitive and easy to use, businesses can ensure that employees adhere to best practices, reducing the risk of human error that often leads to security breaches.

“A lot of fraud is in the checks. If you cut out checks, you cut 60% of fraud right there,” Ernest Rolfson, founder and CEO of Finexio, told PYMNTS.

For all PYMNTS B2B coverage, subscribe to the daily B2B Newsletter.