As members of our advisory service will recognize, we have been chronicling the evolution of digital payments in the B2B space for years. At the same time, we have also been advising businesses to speed it up in the transition from paper, since there are more and better solutions than ever before, along with a myriad of other compelling reasons to change. One of the key hurdles to a more accelerated adoption of digital payments has been good old fashioned inertia, which by virtue of its convenience removes the initiative to modernize, since no clear issue challenges the conventional thinking. In this referenced piece found on PaymentsSource, the author discusses one example of how the paper paradigm is being challenged by the new realities of COVID-19 and resulting sledgehammer effects on work processes and economic activity. A focal point in the brief narrative is a 2015 startup Finexio, which provides payments automation capabilities, using, among other tools, virtual card accounts.
‘Stay-at-home mandates from governments and employers are disrupting the once-staid B2B payments landscape, forcing many buyers and suppliers to reconsider how they pay invoices and receive payments…“We’re the busiest we’ve ever been since we were founded,” said Ernest Rolfson, founder and CEO of Finexio. “The trend is that companies want to pay digitally because they are locked out of their facilities or have a mandate to do so. Everyone is being forced to work remotely and what they were doing manually can no longer be done in a [work from] home environment. Signups for virtual cards are up 2,000% in the last month.” ‘
During the course of our frequent discussions with folks across various industry topics in the past six weeks, one clear impression we get is palpable belief exists that a catalytic moment has arrived for digitalization of….well, just about anything we have discussed, including payments. It is our belief that indeed, if such a moment is upon us, those who take the leap will not be looking for a rope bridge to cross back over the gap. A wise analyst in the blog even says so, therefore we know it’s true.
‘Invoices that may have been traditionally paid with paper checks and ACH are now being transformed into virtual card payments, as suppliers are demanding faster funds access and large companies are struggling to adapt their payment processes to ones that can work from home. While the switch to digital for many has been sudden, the change is likely to be permanent… Rolfson noted that as the country moves forward it will take longer to heal, particularly for the most affected industries such as travel. Finexio serves a number of major hotel chains, and Rolfson says those chains are already asking themselves how they can send and receive payments more cheaply and with fewer people involved.’
Here’s to moving forward much sooner, rather than later.
Overview provided by Steve Murphy, Director, Commercial and Enterprise Payments Advisory Service at Mercator Advisory Group.