Digital Transformation of B2B Payment Solutions

Digitally transform your business payment solution through intelligent integration—without sacrificing security or compliance.

By Dennis DeGregor, Vice President and Analytics Practice Leader, Trianz

Every business uses some form of payment solution to purchase assets, acquire products for sale and pay for software or services. While the business-to-consumer (B2C) market has seen innovations like contactless payments, digital wallets, and more, the business-to-business (B2B) market has a unique set of challenges.

Businesses primarily use invoices to pay or request payment for B2B goods and services. Where consumers use credit or debit card transactions to pay for goods, enterprises are more likely to use checks or schedule automated clearing house (ACH) transfers. Therefore, a business payment solution calls for a different finance approach, taking other payment methods and the business’s tax liabilities into consideration.

Let’s explore the essential functionality you should be on the lookout for, as well as some current options in the B2B payment solution market.

Functionality to Look for in a Business Payment Solution

When adopting or looking to adopt a business payment solution, it is essential to first verify that it will meet the business’s requirements.

The following areas should be of top priority:

• Capabilities – Business payment solutions have a high degree of complexity. There are typically multiple service tiers with different functionalities serving different user types. To drive the right outcomes, our experience shows that the following are essential: 1) the precision gathering of business requirements, 2) an assessment of the current state and 3) a vision for the future state.

The modern B2B finance market offers extensive functionality with some promising capabilities. These include bookkeeping and tax management, supply chain integration, and AI or ML-based robotic process automation (RPA).

• Reliability – Many businesses make dozens or hundreds of payments per week, so reliability is vital when choosing a business payment solution. While reliability in terms of uptime and low failure rates is essential, the solution should also reliably uphold your financial security, governance, and verification procedures.

Enterprises should check a prospective finance vendor’s uptime statistics and service level agreements (SLAs) to verify that the solution is reliable. A reliable vendor will also offer native PCI-DSS compliance and additional ISO standards like ISO 27001, safeguarding the business against regulatory compliance problems. Finally, proper verification should be present to prevent fraud and streamline finance security management.

• Integration – Many finance digital service providers are racing to enable seamless integration with other third-party independent software vendor (ISV) solutions. Enterprises are trending towards adopting multiple solutions to achieve their goals, making REST-API or RESTful support an essential feature.

Business finance solutions have great potential to transform the business when integrated correctly with accounting, payroll, supply chain purchasing and analytics visualization tools.

• Usability – A good user experience with a business finance solution can significantly improve finance productivity. This includes the graphical user interface (GUI) as a foundation, and any workflows and processes the solution may use to deliver functionality.

Modern digital business payment solutions should minimize the number of processes being used, delivering faster turnaround times via automation while minimizing human intervention and labor cost.

Digital Business Payment Solution Options

Some examples in the current business payment solution market include:

Batch Payment Processing

Considering that businesses process a large number of payments each day, batch processing is a great way to expedite payment processing times.

One example of this is Transferwise, a service that allows businesses to process up to 1000 transfers at once, with automatic conversion to the target currency using the CSV file format.

Transaction Visibility and Reporting

Enterprises can benefit from full transaction visibility and visualized reporting with modern business payment solutions. This data can be ingested from a finance-specific data lake, or be integrated with individual credit card accounts thanks to the development of banking integration APIs.

While the US does not readily support banking APIs as of January 2021, US banking’s future-state may look similar to the UK’s Open Banking initiative. This provides read-only access to transaction data through the Open Banking Gateway API, enabling data ingestion to analytics and reporting platforms. Challenger banks paving the way in this area across the US include Monzo, Revolut, and N26—to name just a few.

AP and AR Automation

By automating Accounts Payable (AP) and Accounts Receivable (AR) processes, enterprises can benefit from more accurate invoices, fully digitized records, and lower processing costs. These improvements manifest through the consistency of RPA, removing the risk of human error and expediting processing speeds.

In this area, one player is Bill, which supports SAP and Sage data integration through CSV templates, along with Xero and QuickBooks for two-way synchronization for accounting purposes. Bill outsources IT hosting for finance systems and enables AP and AR through a web application interface, thereby reducing the IT management burden.

A rigorous, industry-proven approach is required to ensure successful deployment of complex B2B payment solutions. Read our compelling case study on a payment solutions analytics dashboard on Trianz.com.

 

This is a Sponsored Feature.