B2B Payments’ Pivot To Digital

“Fundamental changes to the B2B payments landscape are taking place today, faster than ever before, helping the ecosystem eliminate inefficient B2B payments processes.”

Access to capital hasn’t been this tight since the market meltdown of 2008, so motivated players are finding better, faster ways of moving B2B funds especially. “Today, visibility and speed of paying suppliers — and getting paid — are critical for businesses,” said Kevin Phalen, global head of Visa Business Solutions at Visa. “To meet this need, the payments ecosystem is pivoting away from entrenched manual and paper-based processes. The stage was set for that pivot over the past few years. The trend of consumerization of B2B payments has familiarized individuals with the ease of making payments quickly and across a variety of form factors.”

The following is an excerpt from How 35 Execs Are Powering The Great Digital Shift Of 2020 (And Beyond), contributed by Kevin Phalen, global head of Visa Business Solutions at Visa.

The uncertainty that has rippled across the economic and public health spheres in the wake of the coronavirus has put pressure on companies to retool what they do and how they do it.

The paper check has defied the odds and has been a go-to B2B payment staple. Technologies come and go, and yet this way of making a payment has remained. However, the movement toward working from home has exposed the inefficiencies associated with paper checks in the B2B payments space. Banks were closed. Paper checks delivered to offices sat in unopened envelopes. Thus, the pivot to digital B2B payments became an immediate priority for businesses.

Today, visibility and speed of paying suppliers — and getting paid — are critical for businesses. To meet this need, the payments ecosystem is pivoting away from entrenched manual and paper-based processes. The stage was set for that pivot over the past few years. The trend of consumerization of B2B payments has familiarized individuals with the ease of making payments quickly and across a variety of form factors.

At Visa, together with our partners, we are working with our financial institution clients to deploy tools that help their corporate clients — from SMBs to multinational enterprises — access their funds and gain a better visibility into the overall payment process. That points to the immediate evolution of accounts payable — where digitization, end to end, will go a long way toward phasing out the check.

With such wide-scale digitization in place, all stakeholders in the B2B ecosystem can benefit. Suppliers want to know they are getting the full amounts they are owed — and on a particular date, with certainty. The enterprises making those payments want to have transparency, too, into their cash flow — which improves when not trying to guesstimate when a check is cashed.

Fundamental changes to the B2B payments landscape are taking place today, faster than ever before, helping the ecosystem eliminate inefficient B2B payments processes.