Fintech innovation has come a long way in democratizing sophisticated payments systems and solutions for small and medium-sized businesses. Solutions that not only streamline the payment process but also enhance how merchants handle their accounts can differentiate one independent software vendor from the next.
Each year, global businesses drive more than $120 trillion in B2B commerce. B2B payments are a notorious pain point for many SMBs — and often an expensive one. ISVs that facilitate streamlined B2B payments can help SMBs optimize payment processes that are likely inefficient and cumbersome, saving them time and money in the end.
Aside from overall control and visibility into payments, there are a variety of challenges that can cause headaches for merchants of any size. These hang-ups only become more severe as their business expands, so ISVs that optimize B2B payments within their software solutions stand to save the day for merchants who want to grow but feel hamstrung with their current solutions.
Speed and cash flow. When it comes to B2B payments, merchants should be focused on speed, but many simply set their sights on on-time payments. While on-time payments are certainly a reason to celebrate, there is a missed opportunity for improved cash flow and smoother processes that come with fast payments.
Digitization. Almost 70% of B2B volume in the U.S. is still paid by paper checks, leading to inefficient, disorganized and expensive payments. Paper-based invoicing and customer records are outdated ways to handle payments, and they also present significant compliance implications that could end in breaches, fines, and fees.
Security. Digital B2B payments are more secure than traditional B2B payments. Businesses that rely on paper checks are vulnerable to mail theft. Postal Inspection Service data shows that mail theft reports have increased a whopping 600% over the past three years. Digital B2B payment solutions eliminate this possibility and can also add value through more sophisticated security features.
It’s clear that B2B payments are still experiencing growing pains within many organizations. Without a streamlined, end-to-end solution, many merchants will continue to rely on outdated processes to make do.
ISVs have an opportunity to stand out from the crowd by helping merchants streamline B2B payments and eliminate these pain points. Not only does it help merchants save time and money, but it also presents a competitive advantage and opens up new revenue streams for ISVs.
Software solutions and the developers that create them face increased scrutiny from merchants who have many different options available to them. This hot competitive landscape means developers must embrace ways to differentiate and earn new revenue. Here are a handful of ways that B2B payments achieve those goals for developers.
Adaptability. Merchants are looking for versatile software solutions that meet all of their needs and help them adapt to a quickly changing digital landscape. Offering digital B2B payments meets merchants where they are and facilitates a better way to manage procurement, invoicing, and invoice payments.
Differentiation. Digital B2B payments are becoming table stakes across industries. Ease of use, security, and integration with other systems and processes means developers that offer B2B payments functionality are keeping pace with the demands of the market and differentiating themselves from competitors who do not. Ultimately, B2B payments can boost adoption and sales.
New revenue streams. In addition to boosting sales, a digital B2B payments offering that rounds out a robust software solution can also add new revenue streams via both the transactions merchants process on the front end and the accounts payable solution they offer on the back end.
Merchants themselves face increased scrutiny from their own vendors and others they do business with to provide a frictionless B2B payments experience. Internally, they face time and resource pressures that make a seamless B2B payments solution that offers the following benefits one that is highly sought after.
Simple integration. Most merchants are not interested in a change to their operational procedures let alone asking their vendors to change theirs. With a solid B2B payments solution, no change to the current payables process is required, making integration a breeze.
Reconciliation. Paper-based solutions are disorganized and difficult to reconcile. Digital B2B payment solutions can allow for 100% reconciliation.
Cost savings. Paper checks are expensive to process, costing anywhere from $4 to $20 per check. Merchants can eliminate this unnecessary cost with a digital B2B payments solution.
These are just some of the benefits that merchants enjoy through a software provider that offers B2B digital payment solutions. Automation, error reduction, data integrity, enhanced security, better cash flow and improved communication also make it a winning proposition for merchants to consider.
We live in a quickly evolving digital world that requires forward-thinking solutions and ISVs keen on developing them. The tide is moving in the direction of digital B2B payments and smart ISVs will go with the flow and find a way to integrate them into their offerings.
