In today’s world of business payments we’re starting to see a reflection of the same digital transformation that has impacted consumer payments. The industry is beginning to envision what business payments can — and should be — in a digital world; now it’s a matter of embracing the technology and processes necessary to make digital business payments a reality.
Why has this evolution of business payments lagged behind their consumer counterparts? The reason is simple: Complexity.
Business payments involve considerably greater scale and detail than consumer ones. Think about someone receiving money from a friend through a peer-to-peer payment app like Zelle or Venmo. They likely wouldn’t question what the money was for — $5 for coffee, $16 for a movie or $145 for concert tickets, the payment process is simple and clear and the necessary “remittance” data is understood and transmitted easily through casual conversation.
There’s no such simplicity with business payments. Organizations make and receive thousands of payments from around the globe each day, a massive amount of complex data that needs to be processed and reconciled in terms of what’s been paid and what’s still owed. Such tasks require robust payment systems, which is why many businesses continue to make most of their payments using checks. It isn’t ideal and it certainly isn’t cost effective, but it’s by far the easiest for organizations because the processes and people are already in place to process those transactions and all the necessary remittance detail is included with the check.
Meeting Customer Expectations
While trends and technology like Open Banking and the cloud will help drive the digital transformation of business payments, the expectation of the customer is the most important factor.
Think about how people used to rent a movie, call a cab, book a place to stay, or even order a pizza. Disruptive companies have upended the way we, as consumers, research, select, and pay for products and services. Today’s corporate payment professionals have become accustomed to doing things differently with technology in their personal lives, which means business payments must digitally transform—prompting the need for solutions that meet higher expectations of convenience, speed, flexibility, and intelligence. Finance professionals have come to expect or certainly desire the payments they manage at work to follow a similar, streamlined approach to the payments they exchange in their personal lives.
The Importance of Security
Having the right payment solution is one thing – businesses simply can’t operate at the highest levels if their behind-the-scenes payment systems aren’t running as efficiently as possible. Security is another important consideration. The payments industry is in an undeclared war with a virtual army of stealthy cyber criminals. Nothing else matters if you can’t ensure the security of the payment, period. It’s up to the banks, payment platforms, and business customers to ensure the security of business payments. To that end, the future of business payments is going be as focused on securing the payment as it is on enabling it.
For example, a future business payment platform will use machine learning to analyze the validity of a payment request against metrics like how the payment has been made in the past, if the payment is consistent with what the business initiating the payment usually does, and even the grammar of the person supposedly ordering the payment.
The right technology can help defend against malicious actors, flagging suspicious activity before it happens, and providing an important, strong, additional protection link in the security chain. Fraudulent insiders may only be identified when another employee notices discrepancies. In both cases, the money and identity information that’s been stolen may be long gone.
The B2B payments industry is at the cusp of a digital transformation. Finance departments will only adopt new technologies and automate more payment processes if their needs around information, system integration, and security are met. Thankfully, forward-thinking B2B payment providers have created solutions that meet the needs of today as well as those of tomorrow. Organizations simply need to decide that the time to switch is now.