Because business owners are also consumers, they have long known that B2B payments aren’t as convenient and instantaneous as the payments they use in their personal lives.
“I think there are opportunities here in the very near future, and particularly with the push of the pandemic, that we’ll see a massive push to continue consuming the B2B payments space,” Norm Marraccini, senior Vice President and Head of Commercial and Retail Solutions at SIF, said PYMNTS.
Noting that people are still writing checks for B2B transactions, he said they have the ability to pay bills and view invoices with the click of a button, all on their phone.
Help people pay faster, collect faster
When business owners can send a payment request, activate payment in a few clicks, and clear payments in real-time or even next day, it’s a better option for the business owner than writing checks, initiate an automated clearinghouse request or wait days for invoices.
“Not only thinking about using time better and growing your business, but also getting paid faster,” Marraccini said.
Real-time payments also reduce costs. The current process is very manual and costs businesses time and effort.
See also: FIS predicts that 30-50% of B2B payments will travel on real-time rails by 2025
“If we look at the thousands of payments that cross the trading space, and I can get that
done in real-time or near-real-time, my cost and turnaround time for myself as a business owner and for my employees is a tremendous opportunity to take some of the friction out of business,” Marraccini said.
Faster payment also improves a business’s working capital opportunities. Today, with a one-time payment tool or a virtual card, businesses can collect their funds faster if suppliers offer a 5% discount to buyers who pay the invoice quickly, both parties benefit.
“With what FIS is building and what we have today, we can step in directly and do it on a payable side or even on a receivable side to help people recover faster as well,” Marraccini said.
Build a closed-loop payment network
This approach can also be applied to the world of person-to-person (P2P) payments with payout options that allow a business to pay a consumer or other business in real time.
Looking ahead, Marraccini said he expects to see an end to the current bifurcation between debts and receivables. The solution would include a one-stop-shop for businesses that would present payables and receivables on the same portal, same user experience, same look, and same ability to increase efficiency. This would also include the ability to transfer payments without leaving the FIS infrastructure.
“The next 24 to 36 months for me is, ‘How do I build this closed-loop payment network?'” Marraccini said. “We have the largest payment infrastructure in the world, and the ultimate goal is to look at the possibility of us being able to connect here in the United States to someone in Singapore and make a transaction in real time without having to leave the FIS network.”
See also: Consumerized digital business payments enrich the customer experience
——————————
NEW PYMNTS DATA: 70% OF BNPL USERS USE BANK PAYMENT OPTIONS, IF AVAILABLE
On: Seventy percent of BNPL users say they would prefer to use the installment plans offered by their banks – if only they were made available. PYMNTS’ Banking On Buy Now, Pay Later: Installment Payments and the Untapped Opportunity of FIssurveyed over 2,200 US consumers to better understand how consumers view banks as BNPL providers in a sea of BNPL pure-players.