3 Trends Reshaping B2B Payments

October 2022

<p>3 Trends Reshaping B2B Payments</p>

Nobel Prize-winner and New Keynesian economist Joseph Stiglitz said, “It is trust, more than money, that makes the world go round.” But it can be hard to trust the things that you can't see.

Every day, the world moves its money with more speed and accuracy than ever before. The global payments industry is evolving in real time, exploding with new and creative forms of cash flow. Most payment providers are comfortably positioned ahead of the curve, but B2B payments are only just beginning to reflect the advantages of these new payment trends.

We’ll give you a preview into the future of B2B payments and share three emerging B2B payment tools you can use to build trust in your business—and keep it.

1. Digital Payments

As the business world modernizes, many legacy payment systems and processes are showing their limitations, including one payment method known for its speed, or lack thereof: paper checks.

Digital commerce moves as fast as electricity. Paper payment systems and other slow processing methods just can’t keep up. That's why real-time payments rule the day. Real-time payments made with digital payment methods are the most effective way to manage cash flow and speed up revenue cycles, enabling electronic purchases across a variety of virtual payment solutions—including virtual debit card and virtual credit card payments, and buying and selling with Bitcoin and cryptocurrencies that use blockchain technology.

And it’s no wonder these instant payment types are so popular. Out of all payment preferences, digital payments are the most flexible. There are so many ways to send and receive payments—anytime, anywhere. Just break out the digital wallet or save your payment details on your preferred online payment platform. Digital payments are also economical because they lower the cost of labor required to accept payments and process transactions, as well as the other transaction fees associated with more traditional payment processing systems historically used by financial institutions and the payments industry. And as we’ve said before, digital payment options are secure! Digital transactions use multifactor authentication to secure payment details, bank account information, and customer data. This reduces the risk of data theft, fraud or cyberattacks on the money you’re sending—and the money you’re not.

Not convinced? Let’s look at the numbers. Accounts payable automation and digital invoicing software company Stampli estimates electronic business-to-business payments are the preferred payment method for more than half of organizations when sending and receiving money. For businesses? Only 30%. But another study suggests that might change—and quickly. Digital technology market research firm Juniper Research estimates that these instant payments could have a radical effect on the payments industry, potentially jumping as much as six-fold over the course of the next three years. And they attribute 89% of that increase to digital becoming the preferred payment method for B2B payments.

Let one of our digital payments experts share more about what payment method might be right for you and how you can start taking payments on your own terms.

2. Embedded Banking

What is embedded banking? Easy. That’s what it is. Imagine having many of the same services you get through one of your preferred financial institutions built into your payments solutions. Use these digital services to connect to and integrate with new partners or businesses you frequently work with and you’ll benefit from what’s called “collaborative commerce.”

To put it simply, “collaborative commerce” means using new digital solutions, like embedded banking and digital payments, to coordinate the way you accept payment, request payment, and receive or defer payment—maximizing efficiency, profitability, and consumer relationships.

Here is what it could mean for you and your business: to start, simplified accounts payable and accounts receivable. Then, how about electronic payments, automated payments, and mobile payments or smart payments (payments with more data to ensure they get processed correctly and quickly) that are sent directly, doing away with costly intermediary vendors? Your billing and invoicing software will thank you, not to mention your bottom line.

Want to shorten billing cycles and cut through the clutter? Embedded banking can help with that too. Your accounts receivable could be taking digital payments and electronic bank transfers quickly and reliably from multiple B2B payment options and sources without the potential for a paper-trial mix-up. Reliable reporting from all your accounts, payment solutions, and payment providers in one single place would eliminate the tedium of bookkeeping. And up-to-date transaction logs, detailed histories, and comprehensive consumer experience data would help you better serve the customer, your partners, and yourself.

3. Artificial Intelligence & Machine Learning

You have a friend in AI. As intimidating and frightening as it may be, machine learning is a B2B payment trend that is helping humanize the economics of business-to-business payments by freeing up work hours usually dedicated to payment processing and accounting. That means business owners can focus on leveraging innovation and growth to improve cash flow and grow their bank accounts. Employees are free to focus on other tasks. The computer takes care of the administrative heavy-lifting, and the payment industry does the rest. Talk about streamlining your business model!

AI and machine learning is also one of the digital payments trends that can also positively impact the customer payment experience. Using marketing research, physical and digital analytics, and other automatically collected or force-fed metrics, businesses can quickly—and accurately—analyze their strengths, weaknesses, and pain points. And all without the expensive, outside consultancies or time-consuming focus groups.

To trust in your future is to trust in the future. Some businesses are already winning critical customer loyalty by offering a broad range of easy, effective, and most importantly, trustworthy payment solutions rich with insightful customer data and advanced security technology. Are you?

From digital payment options and electronic payment systems to digital wallets or a payment gateway, Key can help you navigate the world of B2B payments with confidence. To learn more, watch Head of Enterprise Payments and Analytics Ken Gavrity discuss the verticalization of B2B payments with PYMNTS CEO Karen Webster. For advice on digital payments specific to your industry, visit Key Merchant Services.

All merchant services, credit, loan and leasing products are subject to credit approval and terms of service.

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Clients using a TDD/TTY device:
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